O Macmillan Learning The memo mentions that opponents to a higher minimum wage usually cite the theoretical findings of a binding minimum wage in a standard supply and demand model of the labor market- that a binding minimum wage will lead to a surplus of labor, in other words, unemployment in the low skilled labor market. a. In the diagram, shift the wage line to capture the effect of a binding minimum wage. Wage ($ per hour) 4 2 20 18 16 14 12 10 8 6 0 ↑ 0 2 D 14 16 18 20 4 6 8 10 12 Number of workers employed in thousands. W S PS with no MW PS with MW

O Macmillan Learning The memo mentions that opponents to a higher minimum wage usually cite the theoretical findings of a binding minimum wage in a standard supply and demand model of the labor market- that a binding minimum wage will lead to a surplus of labor, in other words, unemployment in the low skilled labor market. a. In the diagram, shift the wage line to capture the effect of a binding minimum wage. Wage ($ per hour) 4 2 20 18 16 14 12 10 8 6 0 ↑ 0 2 D 14 16 18 20 4 6 8 10 12 Number of workers employed in thousands. W S PS with no MW PS with MW

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 46P: A government passes a family-friendly law that no companies can have evening, nighttime, or weekend...

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Similar questions

What is die price commonly called in the labor market?
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Why is a living wage considered a price floor? Does imposing a living wage have the same outcome as a minimum wage?
Why are the factors that shift the demand for a product different from the factors that shift the demand for labor? Why are the factors that shift the supply of a product different from those that shift the supply of labor?
Assume that the supply of law-skilled worker is fairly elastic, but the employers demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor? What if the policy goal is to raise wages for this group? Explain your answer with supply and demand diagrams.
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Name some factors that can cause- a shift in the supply curve in labor markets.
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Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union. What would the equilibrium wage and quantity be in this market if no union existed? Assume that the union has enough negotiating power to raise the wage to 4 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?
Imagine that to preserve the traditional way of life in small fishing villages, at government decides to impose a price floor that will guarantee all fishermen a certain price for their catch. Using the demand and supply framework, predict the effects on the price, quantity demanded, and quantity supplied. With the enactment of this price floor for fish, what are some of the likely unintended consequences in file market? Suggest some policies other than the price floor to make it possible for small fishing villages to continue.
Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?
A government passes a family-friendly law that no companies can have evening, nighttime, or weekend hours, so that everyone can be home with their families during these times. Analyze the effect of this law using a demand and supply diagram for the labor market: first assuming that wages are flexible, and then assuming that wages are sticky downward.