(1) Solve for Equilibrium level of Wage Level (W*) and employment (L*) : W* = and L* (2) Estimate consumer of labor (Firms') surplus and Producer of Labor (Laborers') surplus: (Laborers) Consumer (Firms') surplus_(a)_ Producer surplus (b). at Equilibrium (1) before Government intervenes. (3) Suppose Government passed a minimum wage law setting Minimum Wage Level (Wm) to be equal to 60 (Wm =60). At this minimum wage level, estimate excess supply of Labor: Excess Supply of Labor Quantity=.
(1) Solve for Equilibrium level of Wage Level (W*) and employment (L*) : W* = and L* (2) Estimate consumer of labor (Firms') surplus and Producer of Labor (Laborers') surplus: (Laborers) Consumer (Firms') surplus_(a)_ Producer surplus (b). at Equilibrium (1) before Government intervenes. (3) Suppose Government passed a minimum wage law setting Minimum Wage Level (Wm) to be equal to 60 (Wm =60). At this minimum wage level, estimate excess supply of Labor: Excess Supply of Labor Quantity=.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:13. Suppose the following information is given in a labor market:
(Demand function (D) for Labor by Firms) W = 80 – Le
%3D
(Supply function (S) of Labor by laborers) W = 20 + Le
An appropriate Diagram is drawn below and answer the following questions:e
W
Se
80e
Wme
W*e
20
0.
L
and
(1) Solve for Equilibrium level of Wage Level (W*) and employment (L*): W* =
w/
Transcribed Image Text:D
Le
(1) Solve for Equilibrium level of Wage Level (W*) and employment (L*) : W* =
and
L* =
(2) Estimate consumer of labor (Firms') surplus and Producer of Labor (Laborers') surplus:
Consumer
(Firms')
surplus_(a).
Producer
(Laborers)
surplus_(b).
at Equilibrium (1) before Government intervenes.e
(3) Suppose Government passed a minimum wage law setting Minimum Wage Level (Wm) to
be equal to 60 (Wm =60). At this minimum wage level, estimate excess supply of Labor:
Excess Supply of Labor Quantity=,
(4) Estimate consumer of labor (Firms') surplus and Producer of Labor (Laborers') surplus:
Consumer (Firms') surplus
Producer (Laborers) surplus
at
level.e
Equilibrium (3) after Government intervenes by setting a minimum wage
(5) Estimate deadweight loss after Government imposed the minimum wage level: Deadweight
Loss
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