Suppose a firm's labor demand equation is Ld=50-4(w), and the labor supply equation that it faces is L, -14+4(w), where w is the wage per hour worked. The government imposes a minimum wage = that is 25% above equilibrium wage. As a result there will be O an increase in unemployment by 26. a decrease in unemployment by 10. an increase in unemployment by 16. a decrease in unemployment by 12. O no change in unemployment

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Suppose a firm's labor demand equation is Ld=50-4(w), and the labor supply equation that it faces
is L, -14 + 4(w), where w is the wage per hour worked. The government imposes a minimum wage
that is 25% above equilibrium wage. As a result there will be
O an increase in unemployment by 26.
a decrease in unemployment by 10.
an increase in unemployment by 16.
a decrease in unemployment by 12.
O no change in unemployment
Transcribed Image Text:Suppose a firm's labor demand equation is Ld=50-4(w), and the labor supply equation that it faces is L, -14 + 4(w), where w is the wage per hour worked. The government imposes a minimum wage that is 25% above equilibrium wage. As a result there will be O an increase in unemployment by 26. a decrease in unemployment by 10. an increase in unemployment by 16. a decrease in unemployment by 12. O no change in unemployment
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