Question

The graph to the right depicts the market for unskilled labor. With the market initially in equilibrium, let a minimum wage be set at $8 per hour. The amount of unemployment is now The Market for Unskilled Labor O A. zero. OB. 40,000 hours of labor. C. 50,000 hours of labor. OD. 20,000 hours of labor. Min Wage Wage ($ per hour) 10 20 30 40 50 60 70 80 Hours of Labor ('000) 90 100

Answer 1

1. The amount of unemployment is now (B)40,000 labor hours.

Explanation: At equilibrium (where the demand and labor curves intersect), the wage rate is $6 per hour and 50,000 hours of labor. When the minimum wage is set at $8 per hour, the quantity demanded is 30,000 labor hours while the quantity supplied is 70,000 labor hours. Since labor supplied exceeds labor demanded, the level of unemployment is the excess labor supplied, that is, 70000-30000= 40,000 labor hours.

2. The correct answer is (d) the yield is 4.6%

Explanation:

(A) is incorrect since the formula for price earnings ratio​ is dividing the price of the​ stock by the earnings per share of the​ company. The earning per share is not given in the question.

(B) is incorrect since we do not know the previous yield of stock.

(C) is incorrect since there is insufficient information to calculate the volume of shares determined.

(D) is correct since yield of stock= dividend/price of stock

Putting the values, 2.74/60= 4.6%