The figure below displays a market for teenage labor with a minimum wage of $6 per hour How many workers are unemployed at the $6 minimum wage? LS-LD. 30 (=70-40) The government places an hourly tax of $1 per worker on employers. Show the effect of the tax on the demand for labor. With both minimum wage and the labor tax, how many workers do firm employ? What is the incremental effect of the tax on employment? With both minimum wage and the labor tax, how many workers are unemployed? What is the incremental effect of the tax on unemployment?
The figure below displays a market for teenage labor with a minimum wage of $6 per hour How many workers are unemployed at the $6 minimum wage? LS-LD. 30 (=70-40) The government places an hourly tax of $1 per worker on employers. Show the effect of the tax on the demand for labor. With both minimum wage and the labor tax, how many workers do firm employ? What is the incremental effect of the tax on employment? With both minimum wage and the labor tax, how many workers are unemployed? What is the incremental effect of the tax on unemployment?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The figure below displays a market for teenage labor with a minimum wage of $6 per hour
- How many workers are unemployed at the $6 minimum wage?
LS-LD. 30 (=70-40)
- The government places an hourly tax of $1 per worker on employers. Show the effect of the tax on the
demand for labor.
- With both minimum wage and the labor tax, how many workers do firm employ? What is the incremental effect of the tax on employment?
- With both minimum wage and the labor tax, how many workers are unemployed? What is the incremental effect of the tax on
unemployment ?

Transcribed Image Text:The image contains a graph illustrating the market for teenage labor with a minimum wage.
### Graph Explanation:
- **Axes**:
- The vertical axis represents the wage per worker in dollars, ranging from $0 to $8.
- The horizontal axis represents labor in thousands of workers per hour, ranging from 0 to 70.
- **Curves**:
- There are two main lines in the graph.
- The **Labor Demand** curve slopes downward from left to right, indicating that as wages decrease, more labor is demanded.
- The **Labor Supply** curve slopes upward from left to right, showing that as wages increase, more labor is supplied.
- **Minimum Wage Line**:
- A horizontal line labeled "Min. Wage" is drawn at the $6 mark, indicating the minimum wage set by the government.
- **Equilibrium Points**:
- The point where the Labor Demand and Labor Supply curves intersect at a lower wage (before the minimum wage line) would represent the equilibrium wage and quantity without minimum wage intervention.
- The minimum wage line above the equilibrium point creates a discrepancy between the quantity of labor supplied and the quantity demanded. This results in a surplus of labor, indicating potential unemployment at the $6 minimum wage level.
### Analysis:
The graph visualizes the impact of a minimum wage on the teenage labor market, demonstrating how a minimum wage higher than the equilibrium can lead to unemployment, as the quantity of labor supplied exceeds the quantity demanded.
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