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A case study in chapter 6 discusses the federal
minimum-wage law.
Suppose the minimum wage is above the equilibrium wage
in the market for unskilled labor. Using a supply-and-demand
diagram of the market for unskilled labor, show the market wage,
the number of workers who are employed, and the number of workers
who are unemployed. Also show the total wage payments to unskilled
workers.
Now suppose the secretary of labor proposes a decrease
in the minimum wage (with the lower...
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a. Draw the labor market. Indicate graphically and discuss the
impact of the minimum wage on the labor market.
b. It has been argued that the negative impacts of a minimum
wage increase (higher unemployment) are more than offset by the
favorable impact on incomes (wage*labor use). Such an argument
rests on the assumption that the elasticity of labor demand in
response to a change in wage rates is a. Elastic; b. Inelastic or
c. Unitary in Elasticity. Which range...
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Problems & Applications (Ch 06) Suppose the minimum wage is $6 per hour in the market for unskilled labor, as shown on the following graph Use the grey point (star symbol) to indicate the market equilibrium wage and quantity of labor in the absence of a minimum wage. Then use the purple point (diamond symbol) to indicate the level of employment at the minimum wage provided, and use the orange point (square symbol) to indicate the quantity of labor supplied...
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1) Suppose the Federal current minimum wage, $7.50 per hour, is
above the equilibrium wage in the market for unskilled labor. and
that the equilibrium wage in this market is $7.25/hr. Draw a supply
and demand diagram showing this market for unskilled labor. Label
the price axis (“Wage/Hour”), the quantity of unskilled labor axis
(“Quantity”), the demand curve (“D0”), the supply curve (“S0”), the
equilibrium wage ($7.25/ hr), and the equilibrium quantity
(“Q0”).
2) On the same diagram, show the...
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Recently, the Federal Minimum Wage is set at $7.25 per hour.
1. Suppose the market for unskilled labor is currently in
equilibrium and that the equilibrium wage in this market is
$7.25/hr. Draw a supply and demand diagram showing this market for
unskilled labor. Label the price axis (“Wage/Hour”), the quantity
of unskilled labor axis (“Quantity”), the demand curve (“D0”), the
supply curve (“S0”), the equilibrium wage ($7.25/ hr), and the
equilibrium quantity (“Q0”).
2. On the same diagram, show...
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@ Currently, the Federal Minimum Wage is set at $7.25
per hour.
1) Suppose the market for unskilled labor is currently in
equilibrium and that the equilibrium wage in this market is
$7.25/hr. Draw a supply and demand diagram showing this market for
unskilled labor. Label the price axis (“Wage/Hour”), the quantity
of unskilled labor axis (“Quantity”), the demand curve (“D0”), the
supply curve (“S0”), the equilibrium wage ($7.25/ hr), and the
equilibrium quantity (“Q0”).
2) On the same diagram,...
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4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers better off and others worse off. b) Minimum wage laws make employers worse off. c) Both a) and b) are true. d) None of the above are true. 5. Consider diagram below, which illustrates the market for low-skilled labour. Suppose that the equilibrium quantity is reduced from Q1 to Q2 units, through the introduction of a price floor. Which of the...
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5. If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or 6. If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on Under which circumstances does the tax burden fall entirely on consumers? İpts on price? Ipts quantity? 1pts 8. What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower...
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Which of the following statements is true? If the price of a good is lowered and total revenue decreases, demand is elastic. If the price of a good is raised and total revenue does not change, demand is perfectly elastic. If the price of a good is lowered and total revenue increases, demand is inelastic. If the price of a good is raised and total revenue increases, demand is inelastic. and relatively inelastic demand is represented by a demand curve...
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Which of the following
statements is (are) correct?
(x)Minimum wage laws
that raise the raise the minimum wage above the equilibrium wage in
the unskilled labor market contribute to the natural rate of
unemployment.
(y)Minimum wages
create unemployment in markets where they create a surplusof labor.
Unemployment of this type is called structural.
(z)If some wages are
forced above the equilibrium level and they are not able to return
to equilibrium, then the economy experiences an increase in
structural unemployment...
Problems & Applications (Ch 06) Suppose the minimum wage is $6 per hour in the market for unskilled labor, as shown on the following graph Use the grey point (star symbol) to indicate the market equilibrium wage and quantity of labor in the absence of a minimum wage. Then use the purple point (diamond symbol) to indicate the level of employment at the minimum wage provided, and use the orange point (square symbol) to indicate the quantity of labor supplied...
4. Which of the following statements about minimum wages is true? a) Minimum wage laws may make some workers better off and others worse off. b) Minimum wage laws make employers worse off. c) Both a) and b) are true. d) None of the above are true. 5. Consider diagram below, which illustrates the market for low-skilled labour. Suppose that the equilibrium quantity is reduced from Q1 to Q2 units, through the introduction of a price floor. Which of the...
5. If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or 6. If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on Under which circumstances does the tax burden fall entirely on consumers? İpts on price? Ipts quantity? 1pts 8. What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower...
Which of the following statements is true? If the price of a good is lowered and total revenue decreases, demand is elastic. If the price of a good is raised and total revenue does not change, demand is perfectly elastic. If the price of a good is lowered and total revenue increases, demand is inelastic. If the price of a good is raised and total revenue increases, demand is inelastic. and relatively inelastic demand is represented by a demand curve...