An increase in the minimum wage is likely to the quantity of labor demanded and at the same time is likely to the quantity of labor supplied. --- -- increase : increase decrease: increase increase : decrease
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- Draw a labor market for un-skilled labor assuming demand is perfectly inelastic. 8b. Insert a minimum wage above the equilibrium wage into the market and illustrate the new wage and new level of employment. 8c. If the number of un-skilled workers rises after a minimum wage is implemented, use economic analysis and derived demand to explain this effect in the labor market.The gazette states that the new national minimum wage is R20.76 – an increase of 3.8%”. Provide a discussion on the welfare effect of the above, that illustrates the case for when the above results in unemployment in the market for domestic workers as well as a case for when the above has no effect on the market for domestic workers. Use a diagram to support your discussion.Predict how each of the following events will raiseor lower the equilibrium wage and quantity of oilworkers in Texas. In each case, sketch a demand andsupply diagram to illustrate your answer.a. The price of oil rises.b. New oil-drilling equipment is invented that ischeap and requires few workers to run.c. Several major companies that do not drill oilopen factories in Texas, offering many well-paidjobs outside the oil industry.d. Government imposes costly new regulations tomake oil-drilling a safer job
- What is the effect of an increase in the price of market goods on a worker’s reservation wage, probability of entering the labor force, and hours of work?Consider a consumer who could earn $400 per week and has 50 weeks available each year to allocate between work (H) and nonmarket time (L). They have no non-labour income. Their utility function is U = C2L , where C is the value of consumption goods. What is their optimal choice for the number of weeks in nonmarket time and consumption? Show this in a diagram. Suppose the government introduces a policy that (i) offers no benefits to people who do not work, (ii) offers a wage subsidy on earnings at a rate of 25%, with a maximum benefit of $5000, and (iii) the benefit is subject to reduction at a rate of 25% for every dollar earned above $20,000 in the year. Show the person’s new budget constraint in a new diagram, and discuss how the person’s optimal choice might change (you do not have to calculate this, but point to where it is likely on the new budget constraint). Discuss how income and substitution effects play a role.When the price of goods X = IDR 2, then the quantity supplied is 6. When the price of goods X = IDR 8, then the quantity supplied is 3True or false ?
- Suppose income-tax rates are increased and as a result consumers experience a decrease in income earned from working. Basic microeconomics predicts that, Demand for normal goods will rise. Demand for inferior goods will rise. Demand for normal goods will fall. Demand for inferior goods will rise and demand for normal goods will fall.In 2002, a French law went into effect that cut the standard work week from 39 to 35 hours (workers got paid for 39 hours even though working 35), while at the same time prohibiting overtime hours from being worked. (Overtime in France is paid at 25% above the normal wage rate.) (a) Draw the old budget constraint, showing the overtime premium after 39 hours of work. (b) Draw the new budget constraint. (c) Analyze which workers in France are better off under the 2002 law. Are any worse off? Explain. I need help with part(c) Please do not copy answers from other websites.Consider a person who can work up to 80 hours each week at a pretax wage of $20 per hour but faces a constant 20 percent payroll tax. Under these conditions, the worker maximizes her utility by choosing to work 50 hours each week. The government proposes a negative income tax whereby everyone is given $300 each week and anyone can supplement her income further by working. To pay for the negative income tax, the payroll tax rate will be increased to 50 percent.a. On a single graph, draw the worker’s original budget line and her budget line under the negative income tax.b. Show that the worker will choose to work fewer hours if the negative income tax is a dopted.c. Will the worker’s utility be greater under the negative income tax?
- A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75. Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula?Consider a worker who earns $20/hour in the labor market and receives $50 per week innon-labor income. Assume the total number of hours available for work (h) and leisure(L) is 168 hours per week (i.e., ? = 168 = ℎ + ?). a. Draw the budget constraint for this individual. Label the endowment point. b. What is the maximum value of consumption that this individual could achieve ina week? c. In the United States, the Fair Labor Standards Act requires workers to be paid 1.5times their usual hourly wage for “overtime” work, defined as work in excess of40 hours in a week. If this law applies to the worker described above, how does itchange the budget constraint? d. Now suppose Congress passes an income tax. The income tax applies to labor andnon-labor income. The Fair Labor Standard Act is still in effect. The first $1,000in weekly income is exempt from the tax. However, every dollar above $1,000 istaxed at a rate of 10%. (To be clear: the tax on $1,000 in income is 0, the tax on$1,001 is…Consider the market for dry vegetables. Suppose that there is an increased taste for healthy diet. What is the intital effect of this shock in the market for dry vegetables? The increased empahsis on health takes the market for dry vegetables out of the equililibrium. Explain how the market adjust to the situation.
