MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
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Chapter 7, Problem 17QE
(a)
To determine
Explain if the government imposed a minimum wage above the equilibrium wage, what would be expected to happen to the result of the shortage of jobs.
(b)
To determine
Explain what happen to the
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The equilibrium price in the housing market is very high. What do you think will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market, because a politician owns housing units in certain areas? How does that affect the poor and the market for housing?
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When the government sets a new minimum wage above the equilibrium wage in the market for labor who is helped and who is harmed? Explain your answer. Be sure to include effects on quantity supplied as well as quantity demanded.
Chapter 7 Solutions
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
Ch. 7.1 - Prob. 1QCh. 7.1 - Prob. 2QCh. 7.1 - Prob. 3QCh. 7.1 - Prob. 4QCh. 7.1 - Prob. 5QCh. 7.1 - Prob. 6QCh. 7.1 - Prob. 7QCh. 7.1 - Prob. 8QCh. 7.1 - Prob. 9QCh. 7.1 - Prob. 10Q
Ch. 7 - Prob. 1QECh. 7 - Prob. 2QECh. 7 - How is elasticity related to the revenue from a...Ch. 7 - Prob. 4QECh. 7 - Prob. 5QECh. 7 - Prob. 6QECh. 7 - Prob. 7QECh. 7 - Prob. 8QECh. 7 - Prob. 9QECh. 7 - Prob. 10QECh. 7 - Prob. 11QECh. 7 - Prob. 12QECh. 7 - Prob. 13QECh. 7 - Prob. 14QECh. 7 - Prob. 15QECh. 7 - Prob. 16QECh. 7 - Prob. 17QECh. 7 - Prob. 18QECh. 7 - Prob. 19QECh. 7 - Prob. 20QECh. 7 - Prob. 21QECh. 7 - Prob. 22QECh. 7 - Prob. 1QAPCh. 7 - Prob. 2QAPCh. 7 - Prob. 3QAPCh. 7 - Prob. 4QAPCh. 7 - Prob. 5QAPCh. 7 - Prob. 1IPCh. 7 - Prob. 2IPCh. 7 - Prob. 3IPCh. 7 - Prob. 4IPCh. 7 - Prob. 5IPCh. 7 - Prob. 6IP
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- Assume the government imposes an effective minimum wage (i.e., one above the equilibrium wage rate that would otherwise prevail in that market). What does our supply and demand analysis implie?arrow_forwardThe government decides to regulate the labor market. Assume the demand for labor is inelastic, while the supply of labor is elastic.a) On a graph, show the equilibrium wage and the employment level. Make sure you label the axes and the curves.b) The government decides to introduce minimum wage: now it’s illegal to offer wage below the minimum wage level. On a graph, show how the market will be affected if the minimum wage is set to be above the equilibrium wage. What wage will be offered on the market? What will happen to the employment level? What negative consequences will this government intervention have?c) Forget about part (b). The government decides to introduce a tax on every worker. On a new graph, without showing any shifts of the curves, show the new wage you’d observethe firms to pay and the wage you’d observe households to receive. Comment on the tax incidence: who will bear most of the burden of the tax? Problem 3: Consumer surplus and producer surplusOn the market for…arrow_forwardDraw supply and demand curves for the labor market. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? If the current market wage is $10.50, how does the labor market adjust back to the equilibrium? If a minimum wage of $8.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? Using the supply and demand graph in part (a) above, illustrate the effect of the price control.arrow_forward
- assume that a minimum wage already exists in society. Please explain the effects on the economy of increasing the minimum wage. Be sure to discuss who gains and who loses(Consumer and Producer surplus) as well the inefficiencies that this price floor would create. Make sure you show this graphically as well.arrow_forwardUse suitable examples to explain the likely effects of a price ceiling.arrow_forwardA government decides to set a price ceiling on bread so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What is the equilibrium price before the price ceiling? What will the excess supply or the shortage be if the price ceiling is set at $2.40? Price Qd Qs $1.60 9,000 5,000 $2.00 8,500 5,500 $2.40 8,000 6,400 $2.80 7,500 7,500 $3.20 7,000 9,000 $3.60 6,500 11,000 $4.00 6,000 15,000 A. $2.80; 1,600 shortage B. $2.80; 1,600 excess supply C. $2.40; 1,600 shortagearrow_forward
- Explain why a shortage occurs in a market where binding price ceiling exist. Does a price ceiling improve the operation of the market?arrow_forwardIs the minimum wage an example of a price floor or a price ceiling? What are the supply and demand impacts of a minimum wage?arrow_forwardWhen there is no intervention, the equilibrium quantity of labor is 4 and the equilibrium wage is $12. Suppose the government decides to impose a price floor in this labor market, as it thinks that a wage of $12 is too low. With the price floor, wages go up to $16, and because of that quantity supplied of labor increases to 5, whereas quantity demanded drops to 2.4. Match the right with the left side correctly: Wages Supply A $16 Price Floor $12 E D Demand 2.4 4 5 Quantity of Labor Consumer surplus before price floor [ Choose ] Producer surplus before price floor [ Choose ] > > B.arrow_forward
- 3. Minimum wage legislation The following graph shows the labour market in the fast-food industry in the fictional town of Supersize City. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (? 20 Market for Labour in the Fast-Food Industry 18 I Wage (Dollars per hour) 16 + Labour Demanded (Thousands of workers) Labour Supplied (Thousands of workers) Supply 480 200 14 12 10 Demand 80 160 240 320 400 480 580 640 720 800 LABOUR (Thousands of workers) WAGE (Dollars per hour)arrow_forwardConsider a market that is initially in equilibrium and the equilibrium price and quantity are P and Q respectively. Then, the government decides to impose a price ceiling at a price of Pc that is less than P. Which of the following statements is correct? 1. After the price ceiling is imposed, the quantity demanded is less than the quantity supplied on the market. 2. After the price ceiling is imposed, the quantity actually sold in the market is lower than it was before the price ceiling was imposed. 3. Producer surplus in the market increased after the price ceiling was imposed. 4. Since Pc is less than P, the price ceiling is effective and therefore, there is no deadweight loss in the market.arrow_forwardGraph Input Tool (? Market for Labor in the Fast Food Industry 20 I Wage (Dollars per hour) 18 6. 16 Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) Supply 232 14 12 10 Demand 4 40 80 120 160 200 240 280 320 360 400 LABOR (Thousands of workers) WAGE (Dollars per hour)arrow_forward
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