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A. Increases wages received by workers by $2.00.

A. Increases wages received by workers by $2.00.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the labour market is characterized by the following functions: Ld = 100 - 5W Qs = 20 + 5W where Ld and Ls are demand and supply for labour, and W is the hourly wage rate. Assume government pays a subsidy of $4 per hour of work for each worker. How does this subsidy change the hourly wages? O A. Increases wages received by workers by $2.00. O B. Increases wages received by workers by $1.50. O C. Decreases wages paid by employers by $4.00. O D. Increase wages received by workers by $1.00.
Transcribed Image Text:Suppose the labour market is characterized by the following functions: Ld = 100 - 5W Qs = 20 + 5W where Ld and Ls are demand and supply for labour, and W is the hourly wage rate. Assume government pays a subsidy of $4 per hour of work for each worker. How does this subsidy change the hourly wages? O A. Increases wages received by workers by $2.00. O B. Increases wages received by workers by $1.50. O C. Decreases wages paid by employers by $4.00. O D. Increase wages received by workers by $1.00.
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