LABOR MARKETS, POVERTY, AND INCOME 372 CHAPTER 13 b. Now suppose the library director announces that the earnings from the job will be divided equally among the 400 students who live in Sue's dormitory. Will Sue still accept? C. Explain how your answers to parts a and b illustrate one of the incentive problems inherent in income redistribution programs. 6. Jones, who is currently unemployed, is a participant in three means-tested welfare programs: food stamps, rent stamps, and day care stamps. Each program grants him $150 per month in stamps, which can be used like cash to purchase the good or service they cover. (LO5) a. If benefits in each program are reduced by 40 cents for each additional dollar Jones earns in the labor market, how will Jones's economic position change if he accepts a job paying $120 per week? b. In light of your answer to part a, explain why means-testing for welfare recipients has undesirable b.H to W p W effects on work incentives. ta 7. Suppose the equilibrium wage for unskilled workers in New Jersey is $7 per hour. How will the wages and employment of unskilled workers in New Jersey change if the state legislature raises the minimum wage from $5.15 per hour to $6 per hour? (LO5) 9 Sup Con wag omi ear 8 Suppose the demand and supply curves for unskilled labor in the Corvallis labor market are as shown in the accompanying figure. (LO5) By how much will the imposition of a minimum wage at $12 per hour reduce total economic surplus? Calcu- late the amounts by which employer surplus and worker surplus change as a result of the minimum wage. ers the Wo De wo гeс em ANSWERS TO CONCEPT CHEC 13.1 At a price of $26 per cutting board, the fifth worker has a VMP of $364 per week, so Adirondack sho