5. Minimum-wage laws and unemployment Consider the market for labor depicted by the demand and supply curves that follow. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Graph Input Tool Market for Labor 16 14 Supply Wage 2.00 (Dollars per hour) 12 1,400 20 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 10 8 Demand 0 0 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $10.00. Then indicate whether this w in a shortage or a surplus. 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 Demanded Labor Supplied Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus? $10.00 Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $10.00. Which of the following statements are true? Check all that apply. Binding minimum wages cause structural unemployment. In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium. In this labor market, a minimum wage of $7.50 would be binding. If the minimum wage is set at $10.00, the market will not reach equilibrium. WAGE (Dollars per hour) 2
5. Minimum-wage laws and unemployment Consider the market for labor depicted by the demand and supply curves that follow. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Graph Input Tool Market for Labor 16 14 Supply Wage 2.00 (Dollars per hour) 12 1,400 20 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 10 8 Demand 0 0 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $10.00. Then indicate whether this w in a shortage or a surplus. 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 Demanded Labor Supplied Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus? $10.00 Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $10.00. Which of the following statements are true? Check all that apply. Binding minimum wages cause structural unemployment. In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium. In this labor market, a minimum wage of $7.50 would be binding. If the minimum wage is set at $10.00, the market will not reach equilibrium. WAGE (Dollars per hour) 2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:5. Minimum-wage laws and unemployment
Consider the market for labor depicted by the demand and supply curves that follow.
Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.
Graph Input Tool
(?)
Market for Labor
16
14
Supply
Wage
2.00
(Dollars per hour)
12
1,400
200
Labor Demanded
(Thousands of
workers)
Labor Supplied
(Thousands of
workers)
10
8
Demand
0
0 200 400 600 800 1000 1200 1400 1600
LABOR (Thousands of workers)
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $10.00. Then indicate whether this wage will res
in a shortage or a surplus.
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 Demanded
Labor Supplied
Wage
(Thousands of workers) (Thousands of workers) Shortage or Surplus?
$10.00
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $10.00.
Which of the following statements are true? Check all that apply.
Binding minimum wages cause structural unemployment.
In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium.
In this labor market, a minimum wage of $7.50 would be binding.
If the minimum wage is set at $10.00, the market will not reach equilibrium.
WAGE (Dollars per hour)
2
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