•Eq. wage=$10 • Eq. employment = 1200 • Min Wage $12 then Equilibrium employment =1100. • Unemployment as a result of minimum wage is 100 workers. • Total sector income prior to minimum wage is: • $10*1200 =$12,000 • Total sector income after minimum wage is:$12*1100 = $13,200 • Inelastic demand: Min Wage increases total income earned 16 14 12 10 8 6 2 500 1000 1500 2000 Labor -labor demand -labor supply 8:16 / 9:08 YouTube CC In our discussion of the effect of a minimum wage, even though implementing a minimum wage will reduce employment, it is possible for a minimum wage to raise the standard of living for all workers (sector workforce) affected by the minimum wage, if the labor demand function of those firms is Select one: a. elastic b. unitary elastic C. inelastic

•Eq. wage=$10 • Eq. employment = 1200 • Min Wage $12 then Equilibrium employment =1100. • Unemployment as a result of minimum wage is 100 workers. • Total sector income prior to minimum wage is: • $101200 =$12,000 • Total sector income after minimum wage is:$121100 = $13,200 • Inelastic demand: Min Wage increases total income earned 16 14 12 10 8 6 2 500 1000 1500 2000 Labor -labor demand -labor supply 8:16 / 9:08 YouTube CC In our discussion of the effect of a minimum wage, even though implementing a minimum wage will reduce employment, it is possible for a minimum wage to raise the standard of living for all workers (sector workforce) affected by the minimum wage, if the labor demand function of those firms is Select one: a. elastic b. unitary elastic C. inelastic

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In an economy:- NDPFC = $24,000 Million Operating surplus = $11,000 million Mixed income = $5500 million Calculate compensation of employees
Problem 2 Let's assume you’ve found the following labor demand and supply curves: Lp 30 – w Ls = 2w (a) Solve for the equilibrium wage and employment level. (b) Graph the demand and supply curves. (c) At this equilibrium, what is your welfare/gains from trade? (d) Now, assume a minimum wage has been implemented at $20. How will this impact your demand? Supply? (e) How many workers are displaced by this new policy? How much “extra" unemployment occurs with this new policy? Hint: Think about the reservation wage. (f) Graph the new labor demand and supply with this minimum wage. (g) At this equilibrium, what is your new welfare? Are you better off with this change? Explain.
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1. Using a standard supply and demand framework and the assumption that skilled and unskilled workers are complementary (rather than substitutes), an increased supply of low skilled immigrant labor is expected to a.lower the wages of unskilled workers, and raise the wages of skilled workers. b.lower the wages of unskilled workers, but have no impact on the wages of skilled workers. c.raise the wages of unskilled workers, and lower the wages of skilled workers. d.lower the wages of both skilled and unskilled workers.
3) The following data table contains the labor demand and labor supply schedules for low-skilled workers in San Francisco. Use the data to answer the questions below. Qd-labor demand W-wage $23.00 $22.00 $21.00 $20.00 $19.00 $18.00 $17.00 $16.00 $15.00 $14.00 $13.00 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 90,000 95,000 100,000 105,000 Qs-labor supply 210,000 200,000 190,000 180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 a) Find the equilibrium wage and quantity of workers for low-skilled workers in San Francisco. Show equilibrium graphically and include the wage intercepts.
Dollars per Hour 6. Historical Perspective a. Analyze Visual 2: Historical Minimum Wage Data. . What trends do you observe in the minimum wage over time? • Why do you think the government has increased the minimum wage over time? FRED-Federal Minimum Wage Rate under the Federal Fair Labor Standards Act 1 1970 1975 Shaded areas indicate U.S. recessions. 1980 1985 1990 1905 2000 2005 2010 2015 O Source: U.S. Department of Labor fred.sticuisted.org
For each of the proposals, use the previous graph to determine the new number of research assistants hired. Then compute the after-tax amount paid by employers (that is, the wage paid to workers plus any taxes collected from the employers) and the after-tax amount earned by research assistants (that is, the wage received by workers minus any taxes collected from the workers). Levied on Employers (Dollars per hour) 4 Tax Proposal 0 2 Levied on Workers (Dollars per hour) 0 4 2 Quantity Hired (Number of workers) After-Tax Wage Paid by Employers (Dollars per hour) O The proposal in which the entire tax is collected from workers O The proposal in which the tax is collected from each side evenly O The proposal in which the tax is collected from employers O None of the proposals is better than the others After-Tax Wage Received by Workers (Dollars per hour) Suppose the government doesn't want to discourage employers from hiring research assistants and, therefore, wants to minimize the share…
Wage Rate $8.00 $5.50 0 250 350 450 Quantity of Labor (in thousands) O $5.50 and 200,000. Sd Assumptions: (1) Employers in this market are willing and able to ignore minimum wage laws; (2) Sd represents the supply of domestic-born (and legal immigrant) workers; (3) St represents the total supply of workers in this labor market (Sd plus illegal immigrants); and (4) unless otherwise stated, illegal immigration is not effectively blocked by the government. O $5.50 and 250,000. St The equilibrium wage and number of illegal immigrants working are, respectively, O $8.00 and 350,000. D O $5.50 and 450,000.
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