Macroeconomics: Private and Public Choice
15th Edition
ISBN: 9781285453545
Author: Russell Sobel; Richard Stroup; James Gwartney; David Macpherson
Publisher: South-Western College Pub
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Chapter 4, Problem 2CQ
To determine
The effect of rent control on college students.
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The City Council of Lincoln, Nebraska has proposed raising the minimum wage in their city up
to $12.50 per hour up from the current level of $9.50. They are not sure what to do because they
want people to make more money but they also want as many people as possible to have jobs.
They are asking you to analyze the situation using the chart below and tell them what you think
will happen if they go through with it and actually raise it to $12.50 per hour.
$16.00
23,000
32,000
9,000
$12.50
$9.50
$7.50
42,000
74,000
At a Minimum Wage of $12.50 per hour what is the level of Excess Supply of Workers willing to work at
that wage?
74,000
0
↑
51,000
quantity
Chapter 4 Solutions
Macroeconomics: Private and Public Choice
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