5. Minimum-wage laws and unemploymentConsider the labor market defined by the supply and demand curves plotted on the following graph.Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.WAGE (Dollars per hour)16141210200Wage$6.00SupplyDemand200 400 600 800 1000 1200 1400 1600LABOR (Thousands of workers)Labor Demanded(Thousands of workers)Graph Input ToolMarket for LaborWage(Dollars per hour)Which of the following statements are true? Check all that apply.Labor Demanded(Thousands ofworkers)2.001,400Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers.Labor Supplied(Thousands of workers) Shortage or Surplus?Labor Supplied(Thousands ofworkers)Complete the following table with the quantity of labor supplied and demanded if the wage is set at $6.00. Then indicate whether this wage will resultin a shortage or a surplus.Suppose the federal government contemplates a new law that would create a national minimum wage of $6.00 per hour.?In this labor market, a minimum wage of $6.00 is binding.□ If the minimum wage is set at $8.50, the market will not reach equilibrium.Binding minimum wages cause frictional unemployment.In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.200

A firm’s willingness to pay for each unit of labor it wishes to hire is shown by the labor demand…

5. Minimum-wage laws and unemployment Consider the labor market defined by the supply and demand curves plotted on the following graph. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. WAGE (Dollars per hour) 16 14 12 9 2 0 0 Supply Demand 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Graph Input Tool Market for Labor Wage (Dollars per hour) Labor Demanded (Thousands of workers) 2.00 1,400 Labor Supplied (Thousands of workers) 200

5. Minimum-wage laws and unemployment Consider the labor market defined by the supply and demand curves plotted on the following graph. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. WAGE (Dollars per hour) 16 14 12 9 2 0 0 Supply Demand 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Graph Input Tool Market for Labor Wage (Dollars per hour) Labor Demanded (Thousands of workers) 2.00 1,400 Labor Supplied (Thousands of workers) 200

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5. Minimum-wage laws and unemployment
Consider the labor market defined by the supply and demand curves plotted on the following graph.
Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.
WAGE (Dollars per hour)
16
14
12
10
2
0
0
Wage
$6.00
Supply
Demand
200 400 600 800 1000 1200 1400 1600
LABOR (Thousands of workers)
Labor Demanded
(Thousands of workers)
Graph Input Tool
Market for Labor
Wage
(Dollars per hour)
Which of the following statements are true? Check all that apply.
Labor Demanded
(Thousands of
workers)
2.00
1,400
Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers.
Labor Supplied
(Thousands of workers) Shortage or Surplus?
Labor Supplied
(Thousands of
workers)
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $6.00. Then indicate whether this wage will result
in a shortage or a surplus.
Suppose the federal government contemplates a new law that would create a national minimum wage of $6.00 per hour.
?
In this labor market, a minimum wage of $6.00 is binding.
□ If the minimum wage is set at $8.50, the market will not reach equilibrium.
Binding minimum wages cause frictional unemployment.
In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.
200

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