EBK PRINCIPLES OF ECONOMICS
8th Edition
ISBN: 8220103600453
Author: Mankiw
Publisher: CENGAGE L
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Chapter 19, Problem 8PA
To determine
Discrimination and wage differential.
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Explain your answer comprehensively about the question stated below:
Suppose Congress were to mandate that all employers had to offer their employees a life insurance policy worth at least $50,000. Use Economic Theory and concepts, both positively and normatively, to analyze the effects of this mandate on employee well-being.
What effect does this mandate have on the demand for labor? Use also curve to demonstrate the answer.
Please answer
11. Problems and Applications Q13
Suppose that Parliament passes a law requiring employers to provide employees some benefit (such as dental care) that raises the cost of an
employee by $4 per hour. Assume that firms were not providing such benefits prior to the legislation.
On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labour.
Wage (Dollars per hour)
20
18
16
14
12
10
8
4
2
0
Demand
+
0 1
+
2
3 4 5 6 7
Quantity of Labour
8
Supply
9 10
New Demand
New Supply
Equilibrium Before Law
Suppose employees place a value on this benefit exactly equal to its cost.
Equilibrium After Law
(?)
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