Graph Input Tool (?) Market for Labor in the Fast Food Industry 20 18 I Wage (Dollars per hour) 6 Supply 16 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 800 336 14 12 10 8 Demand 4 2 80 160 240 320 400 480 560 640 720 800 LABOR (Thousands of workers) WAGE (Dollars per hour)
Graph Input Tool (?) Market for Labor in the Fast Food Industry 20 18 I Wage (Dollars per hour) 6 Supply 16 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 800 336 14 12 10 8 Demand 4 2 80 160 240 320 400 480 560 640 720 800 LABOR (Thousands of workers) WAGE (Dollars per hour)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. In a labor market, workers supply their labor to the market in exchange for wages, and their behavior is represented by the supply curve. Similarly, firms pay wages to obtain labor, and thus their behavior is represented by the demand curve. In this way, wages are the price of labor.
(a). In this market, the equilibrium hourly wage is $_______ and the equilibrium quantity of labor is _______ thousand workers.
(b). Suppose a senator introduces a bill to legislate a minimum hourly wage of $8. This type of price control is called a _______ (options: price ceiling , quota, tax, price floor ).
Expert Solution
Step 1
a)Equilibrium hourly wage=$10
Equilibrium quantity=400 thousand workers.
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