Suppose that, before the mandate, the wage in this market was $2 above the minimum wage. In this case, the wage rate with the employer mandate will be in the level of unemployment. Now suppose that workers do not value the mandated benefit at all. per hour, which will lead to Which of the following statements are true under this circumstance? Check all that apply. Employees are worse off than before the mandated benefit. The supply curve of labor shifts to the left. The equilibrium quantity of labor will remain unchanged. Employers are neither better nor worse off than before the mandated benefit. The wage rate will decline by less than $3. an increase a decrease no changes in the level of employment and

Suppose that, before the mandate, the wage in this market was $2 above the minimum wage. In this case, the wage rate with the employer mandate will be in the level of unemployment. Now suppose that workers do not value the mandated benefit at all. per hour, which will lead to Which of the following statements are true under this circumstance? Check all that apply. Employees are worse off than before the mandated benefit. The supply curve of labor shifts to the left. The equilibrium quantity of labor will remain unchanged. Employers are neither better nor worse off than before the mandated benefit. The wage rate will decline by less than $3. an increase a decrease no changes in the level of employment and

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Economics
Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee
by $3 per hour. Assume that firms were not providing such benefits prior to the legislation.
On the following graph, use the green line (triangle symbel) to show the effect this employer mandate has on the demand for labor.
Demand
Supply
20
18
New Demand
10
14
12
New Supply
10
Equilibrium Before Law
Equilibrium After Law
0 1 2
5
10
Quantity of Labor (Thousands)
Suppose employees place a value on this benefit exactly equal to its cost.
On the preceding graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor.
Suppose the wage is free to balance supply and demand.
Use the black point (plus symbol) to indicate the eauilibrium wage and level of employment before this law, and use the grey point (star symbol) to
indicate the equilibrium wage and level of employment after this law is implemented.
Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to
indicate the equilibrium wage and level of employment after this law is implemented.
True or False: Employers are made worse off but employees are made better off by this law.
O True
O False
Suppose that, before the mandate, the wage in this market was $2 above the minimum wage.
In this case, the wage rate with the employer mandate will be s
v in the level of unemployment.
| per hour, which will lead to
in the level of employment and
an increase
Now suppose that workers do not value the mandated benefit at all.
a decrease
no changes
Which of the following statements are true under this circumstance? Check all that apply.
O Employees are worse off than before the mandated benefit.
O The supply curve of labor shifts to the left.
O The equilibrium quantity of labor will remain unchanged.
O Employers are neither better nor worse off than before the mandated benefit.
O
The wage rate will decdine by less than $3.
o ad sog) odeM

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