5. Minimum-wage laws and unemployment Consider the market for labor depicted by the demand and supply curves that follow. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Graph Input Tool (? Market for Labor 20.0 Wage (Dollars per hour) 2.50 17.5 Supply Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 15.0 875 125 12.5 10.0 7.5 Demand 5.0 2.5 125 250 375 500 625 750 875 1000 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $7.50. Then indicate whether this wage will result in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers. Labor Demanded Labor Supplied Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus? $7.50 Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $7.50. Which of the following statements are true? Check all that apply. O If the minimum wage is set at $10.50, the market will not reach equilibrium. O In this labor market, a minimum wage of $7.50 is binding. O In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium. O Binding minimum wages cause frictional unemployment. WAGE (Dollars per hour)
5. Minimum-wage laws and unemployment Consider the market for labor depicted by the demand and supply curves that follow. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Graph Input Tool (? Market for Labor 20.0 Wage (Dollars per hour) 2.50 17.5 Supply Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 15.0 875 125 12.5 10.0 7.5 Demand 5.0 2.5 125 250 375 500 625 750 875 1000 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $7.50. Then indicate whether this wage will result in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers. Labor Demanded Labor Supplied Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus? $7.50 Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $7.50. Which of the following statements are true? Check all that apply. O If the minimum wage is set at $10.50, the market will not reach equilibrium. O In this labor market, a minimum wage of $7.50 is binding. O In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium. O Binding minimum wages cause frictional unemployment. WAGE (Dollars per hour)
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter28: Unemployment
Section: Chapter Questions
Problem 9PA
Related questions
Question
Transcribed Image Text:5. Minimum-wage laws and unemployment
Consider the market for labor depicted by the demand and supply curves that follow.
Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.
Graph Input Tool
Market for Labor
20.0
Wage
(Dollars per hour)
17.5
Supply
2.50
Labor Demanded
(Thousands of
workers)
Labor Supplied
(Thousands of
workers)
15.0
875
125
12.5 +
10.0
7.5
Demand
5.0
2.5
125
250
375 500 625 750 875 1000
LABOR (Thousands of workers)
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $7.50. Then indicate whether this wage will result
in a shortage or a surplus.
Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers.
Labor Demanded
Labor Supplied
Wage (Thousands of workers) (Thousands of workers) Shortage or Surplus?
$7.50
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $7.50.
Which of the following statements are true? Check all that apply.
O If the minimum wage is set at $10.50, the market will not reach equilibrium.
O In this labor market, a minimum wage of $7.50 is binding.
O In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.
O Binding minimum wages cause frictional unemployment.
WAGE (Dollars per hour)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning