a. Demonstrate graphically the effect of a minimum wage law. Instructions: First use the tool 'EQ' to identify the equilibrium wage. Then use the tool 'Qp' to identify the quantity demanded of labor if the minimum wage is $14. Finally, use the tool 'Qg' to identify the quantity supplied of labor if the minimum wage is $14. Wage rate 20- 18- 16- 14- 12- 10- 8 6- 4- 2- 0 0 10 20 30 Labor Market 9 50 60 70 80 Quantity of labor reset S O 90 100 If the minimum wage is $14, the quantity demanded of labor is wage causes [(Click to select) b. Does economic theory tell us such a law would be a bad idea? EQ 8 and the quantity supplied of labor is This minimum O Economic theory tells us that such a law would be a good idea. It raises the wages of those who are employed. O Economic theory tells us that such a law would be a bad idea. It creates unemployment and wages that are higher than employees deserve. O Economic theory tells us that such a law would be a good idea. It means that employers would hire fewer employees and those employees would be more productive, making the economy more competitive with foreign economies. O Economic theory does not tell us that such a law would be a bad idea. That depends on what one's goals are and how one judges the redistributional consequences of the minimum wage.
a. Demonstrate graphically the effect of a minimum wage law. Instructions: First use the tool 'EQ' to identify the equilibrium wage. Then use the tool 'Qp' to identify the quantity demanded of labor if the minimum wage is $14. Finally, use the tool 'Qg' to identify the quantity supplied of labor if the minimum wage is $14. Wage rate 20- 18- 16- 14- 12- 10- 8 6- 4- 2- 0 0 10 20 30 Labor Market 9 50 60 70 80 Quantity of labor reset S O 90 100 If the minimum wage is $14, the quantity demanded of labor is wage causes [(Click to select) b. Does economic theory tell us such a law would be a bad idea? EQ 8 and the quantity supplied of labor is This minimum O Economic theory tells us that such a law would be a good idea. It raises the wages of those who are employed. O Economic theory tells us that such a law would be a bad idea. It creates unemployment and wages that are higher than employees deserve. O Economic theory tells us that such a law would be a good idea. It means that employers would hire fewer employees and those employees would be more productive, making the economy more competitive with foreign economies. O Economic theory does not tell us that such a law would be a bad idea. That depends on what one's goals are and how one judges the redistributional consequences of the minimum wage.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:a. Demonstrate graphically the effect of a minimum wage law.
3
Instructions: First use the tool 'EQ' to identify the equilibrium wage. Then use the tool 'Qp' to identify the quantity demanded of labor if
the minimum wage is $14. Finally, use the tool 'Qg' to identify the quantity supplied of labor if the minimum wage is $14.
20
14-
12-
10-
8-
4-
2-
Labor Market
50 60 70
Quantity of labor
reset
D
100
If the minimum wage is $14, the quantity demanded of labor is
wage causes (Click to select)
b. Does economic theory tell us such a law would be a bad idea?
EQ
and the quantity supplied of labor is
This minimum.
O Economic theory tells us that such a law would be a good idea. It raises the wages of those who are employed.
O Economic theory tells us that such a law would be a bad idea. It creates unemployment and wages that are higher than
employees deserve.
O Economic theory tells us that such a law would be a good idea. It means that employers would hire fewer employees and
those employees would be more productive, making the economy more competitive with foreign economies.
O Economic theory does not tell us that such a law would be a bad idea. That depends on what one's goals are and how one
judges the redistributional consequences of the minimum wage.
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