Consider the market for low-skilled labor where firms demand labor and workers supply labor. The price of low-skilled labor is the hourly wage paid to the workers in dollars, W. The demand and supply curves are: D(W) = 60 – 2W and S(W) = 30 + W (These give the number of hours demanded/supplied each week in millions, i.e., if S(W)=30 this means there are 30 million hours supplied at that hourly wage. But I will assume your answers are in millions so you don't need to keep writing millions.) The equilibrium wage and quantity are W*=10 and Q*=40. a. Consider a minimum wage of W=$8. What will be the new equilibrium wage and quantity? a. W*= b. Q*= b. Suppose the Democrats implement a new federal minimum wage of W=$12. What will be the new equilibrium wage and quantity? ( a. W*= b. Q*= c. Draw a supply and demand graph with the minimum wage to illustrate your answer to (b).

Consider the market for low-skilled labor where firms demand labor and workers supply labor. The price of low-skilled labor is the hourly wage paid to the workers in dollars, W. The demand and supply curves are: D(W) = 60 – 2W and S(W) = 30 + W (These give the number of hours demanded/supplied each week in millions, i.e., if S(W)=30 this means there are 30 million hours supplied at that hourly wage. But I will assume your answers are in millions so you don't need to keep writing millions.) The equilibrium wage and quantity are W=10 and Q=40. a. Consider a minimum wage of W=$8. What will be the new equilibrium wage and quantity? a. W= b. Q= b. Suppose the Democrats implement a new federal minimum wage of W=$12. What will be the new equilibrium wage and quantity? ( a. W= b. Q= c. Draw a supply and demand graph with the minimum wage to illustrate your answer to (b).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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