Suppose the government imposes a minimum wage of $15 per hour. True or false? (i) If the inverse demand function is P = 100 -15Q + 0.5Q2, Q<=10, and the supply function is Q = P2/18, where Q is in million hours and P is in dollars per hour, the imposition of the minimum wage will cause the market quantity of work hours to increase. (ii) If the demand and supply functions are given by Q = 10 - P and Q = P, where Q is in million hours and P is in dollars per hour, there will be an excess demand for labor
Consider the labor market, i.e. the market for hours of work. When analyzing labor markets, price is just the hourly wage (e.g. 10 dollars an hour), and quantity is the number of hours demanded (by firms) or supplied (by workers).
Suppose the government imposes a minimum wage of $15 per hour.
True or false?
(i) If the inverse
(ii) If the demand and supply functions are given by Q = 10 - P and Q = P, where Q is in million hours and P is in dollars per hour, there will be an excess demand for labor.
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