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Graph Input Tool Labor Market Labor Supply IWage Rate (Dollars per hour) $8.7 12 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 420 580 Surplus Labor 7housands of workers) 160 Labor Demand Labor Demand Shifters Тех Credit (Dollars per hour) 200 400 600 1000 QUANTITY (Thousands of workers) Suppose the minimum wage in this economy is s8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. Ir the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force is ]workers, and unskilled workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = nploed Later Fon x 100 WAGE (Dollars per hour)

Graph Input Tool Labor Market Labor Supply IWage Rate (Dollars per hour) $8.7 12 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 420 580 Surplus Labor 7housands of workers) 160 Labor Demand Labor Demand Shifters Тех Credit (Dollars per hour) 200 400 600 1000 QUANTITY (Thousands of workers) Suppose the minimum wage in this economy is s8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. Ir the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force is ]workers, and unskilled workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = nploed Later Fon x 100 WAGE (Dollars per hour)

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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While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate.
Transcribed Image Text:While economists measure unemployment at the macroeconomic level, microeconomic forces are often responsible for this macro aggregate. In other words, the tie between microeconomics and macroeconomics is inevitable when discussing the level of unemployment in an economy. Suppose the following graph represents the market for unskilled labor in a fictional economy. These workers typically represent the young, inexperienced, or uneducated part of the labor force and are therefore most effected by changes in the unemployment rate.
Graph Input Tool Labor Market 15 Labor Supply IWage Rate (Dollars per hour) $8.7 12 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 420 580 Surplus Labor 160 workers) Labor Demand Labor Demand Shifters Тах Credit (Dollars per hour) 200 400 600 B00 1000 QUANTITY (Thousands of workers) Suppose the minimum wage in this economy is s8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force is workers, and unskilled workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Linenplosed Lahor Force x 100 At a minimum wage of $8.70 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an initial tax credit of so. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $8.70, unemployment of unskilled workers is lower with the tax credit versus without it. O True O False WAGE (Dollars per hour)
Transcribed Image Text:Graph Input Tool Labor Market 15 Labor Supply IWage Rate (Dollars per hour) $8.7 12 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 420 580 Surplus Labor 160 workers) Labor Demand Labor Demand Shifters Тах Credit (Dollars per hour) 200 400 600 B00 1000 QUANTITY (Thousands of workers) Suppose the minimum wage in this economy is s8.70 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $8.70 per hour, the size of the unskilled labor force is workers, and unskilled workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Linenplosed Lahor Force x 100 At a minimum wage of $8.70 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an initial tax credit of so. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $8.70, unemployment of unskilled workers is lower with the tax credit versus without it. O True O False WAGE (Dollars per hour)
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