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) 20.0 17.5 Supply 15.0 12.5 10.0 7.5 5.0 25 Demand 0 125 250 375 500 625 750 LABOR (Thousands of workers) 875 1000 Graph Input Tool Market for Labor Wage (Dollars per hour) 2.50 Labor Demanded (Thousands of workers) 875 Labor Supplied (Thousands of workers) 125 Complete the following table with the quantity of labor supplied and demanded if the wage is set at $12.50. Then indicate whether this wage will result 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? $12.50 Suppose the federal government contemplates a new law that would create a national minimum wage of $12.50 per hour. Which of the following statements are true? Check all that apply. 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 $9.50 would be binding. Binding minimum wages cause structural unemployment. If the minimum wage is set at $12.50, the market will not reach equilibrium.
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) 20.0 17.5 Supply 15.0 12.5 10.0 7.5 5.0 25 Demand 0 125 250 375 500 625 750 LABOR (Thousands of workers) 875 1000 Graph Input Tool Market for Labor Wage (Dollars per hour) 2.50 Labor Demanded (Thousands of workers) 875 Labor Supplied (Thousands of workers) 125 Complete the following table with the quantity of labor supplied and demanded if the wage is set at $12.50. Then indicate whether this wage will result 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? $12.50 Suppose the federal government contemplates a new law that would create a national minimum wage of $12.50 per hour. Which of the following statements are true? Check all that apply. 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 $9.50 would be binding. Binding minimum wages cause structural unemployment. If the minimum wage is set at $12.50, the market will not reach equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text: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)
20.0
17.5
Supply
15.0
12.5
10.0
7.5
5.0
25
Demand
0 125 250 375 500 625 750
LABOR (Thousands of workers)
875 1000
Graph Input Tool
Market for Labor
Wage
(Dollars per hour)
2.50
Labor Demanded
(Thousands of
workers)
875
Labor Supplied
(Thousands of
workers)
125
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $12.50. Then indicate whether this wage will result
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?
$12.50
Suppose the federal government contemplates a new law that would create a national minimum wage of $12.50 per hour.
Which of the following statements are true? Check all that apply.
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 $9.50 would be binding.
Binding minimum wages cause structural unemployment.
If the minimum wage is set at $12.50, the market will not reach equilibrium.
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