Question

help me with A and B

pleasssseeee

thore les Shered than 12 because the se burden is bein with prodreas. c) Who pays a larger burden of the tax? College kids or beer companies? Why? (5pts) college kids, because they have an inelastic demand The labor market for doctors can be represented by the following: Ls=5+3W and Ld=30-2W. a) Graph this labor market, highlighting equilibrium wages W* and quantity of labor L. (10pts) W zw zw b) Discuss and label the wages where a shortage or surplus would exist if the minimum wage is $7.75. (5pts)

Answer 1

. W = 5+3w (Labor Supply fn) ld 20-20 (Labor Demand fn) at cgulbrum. Ha Ls = Lo=L². 5t3w = 30 - 20 (3w +26) = (30-5) Sw: 25 w = (25/5) [w 25 (equilibrium Wage) and L=5+3w 12 5+3(5) L : 20 I (equilibrium grenkty of labor . wagens - 1- 05 20 30 Labor gyanhty. Note: Labor Demend in Lo=30-20 For Youris intercept Prt Lo=0 und Sule for w. for X-exis Interupt put w=o and solve for Lo. Liber Supply in Ls=5+3w for X-unis intercept put wzo and Solve for Ls.

6 minimum wage - $9.95 Lo = 30-0w LD = 30-2(7.75) LD = 30 - 15.5 L = 14.5 Labu 4.5 at minimum wag. Ils = 5+30 is =5+3(7.15) 12 = 28.25 - Labor Supply is 28.25 at minimum wagen Since Labur Supply (Ls) is higher than labor domond (20), there I is Sarpled in market Surplay - Labor Sepply - labor demand Surylas = 28.25-14.5 Surply = 13.15 wage a 2014 7.75 145 20 30 Labor