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If workers are getting paid $8/hour, will the company have enough workers? How do you know?

If workers are getting paid $8/hour, will the company have enough workers? How do you know?

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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### Supply and Demand: Use the following graph and then answer the questions below: #### Labor Supply and Demand Graph ![Labor Supply and Demand Graph](labor_supply_demand.jpg) - **X-axis**: Quantity of Workers - **Y-axis**: Wage Rate ($/Hour) - **Blue Line**: Supply - **Red Line**: Demand This graph illustrates the relationship between the quantity of workers and the wage rate. The intersection of the supply and demand curves represents the equilibrium point. ### Questions: a) **If workers are getting paid $8/hour, will the company have enough workers? How do you know?** b) **If a company needs 7 workers for a job, how much should it offer to pay them? How do you know?** c) **What should the hourly wage be if the company wants to hire all the positions that they need? How do you know?** ### Detailed Explanation of the Graph: - The **supply curve** (blue line) shows the relationship between the wage rate and the quantity of workers willing to work. As the wage rate increases, more workers are willing to work, increasing the quantity. - The **demand curve** (red line) shows the relationship between the wage rate and the quantity of workers that companies want to hire. As the wage rate decreases, companies are willing to hire more workers. #### Equilibrium Point: - The point where the supply and demand curves intersect is called the equilibrium point. At this point, the quantity of workers that companies want to hire equals the quantity of workers willing to work. This is the optimal wage rate and quantity of labor in the market. By analyzing the graph, students can answer the questions based on the equilibrium wage rate and the quantity of workers at different wage rates.
Transcribed Image Text:### Supply and Demand: Use the following graph and then answer the questions below: #### Labor Supply and Demand Graph ![Labor Supply and Demand Graph](labor_supply_demand.jpg) - **X-axis**: Quantity of Workers - **Y-axis**: Wage Rate ($/Hour) - **Blue Line**: Supply - **Red Line**: Demand This graph illustrates the relationship between the quantity of workers and the wage rate. The intersection of the supply and demand curves represents the equilibrium point. ### Questions: a) **If workers are getting paid $8/hour, will the company have enough workers? How do you know?** b) **If a company needs 7 workers for a job, how much should it offer to pay them? How do you know?** c) **What should the hourly wage be if the company wants to hire all the positions that they need? How do you know?** ### Detailed Explanation of the Graph: - The **supply curve** (blue line) shows the relationship between the wage rate and the quantity of workers willing to work. As the wage rate increases, more workers are willing to work, increasing the quantity. - The **demand curve** (red line) shows the relationship between the wage rate and the quantity of workers that companies want to hire. As the wage rate decreases, companies are willing to hire more workers. #### Equilibrium Point: - The point where the supply and demand curves intersect is called the equilibrium point. At this point, the quantity of workers that companies want to hire equals the quantity of workers willing to work. This is the optimal wage rate and quantity of labor in the market. By analyzing the graph, students can answer the questions based on the equilibrium wage rate and the quantity of workers at different wage rates.
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