The following diagram of a labour market is given. Equilibrium is determined by the interaction between the demand for labour (and the supply of labour (S). Wm We No Quantity of labour Equilibrium is reached where the quantity of workers demanded equals the quantity of workers supplied. This is indicated by the intersection of the demand and supply curves (point E). The equilibrium wage rate (that is, the price of labour) is We, and the equilibrium quantity (that is, the level of employment) is Ne. For scenario 9, answer the following questions: 12.1 Explain with reference to the provided diagram what the impact of the imposition of a minimum wage (Wm) will have on the market. (3) 12.2 Explain the difference between nominal (or money) wages and real wages.

The following diagram of a labour market is given. Equilibrium is determined by the interaction between the demand for labour (and the supply of labour (S). Wm We No Quantity of labour Equilibrium is reached where the quantity of workers demanded equals the quantity of workers supplied. This is indicated by the intersection of the demand and supply curves (point E). The equilibrium wage rate (that is, the price of labour) is We, and the equilibrium quantity (that is, the level of employment) is Ne. For scenario 9, answer the following questions: 12.1 Explain with reference to the provided diagram what the impact of the imposition of a minimum wage (Wm) will have on the market. (3) 12.2 Explain the difference between nominal (or money) wages and real wages.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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