Below tables shows the data on labor market of Drivers in Muscat city of Oman. Wage rate Monthly in OMR Quantity Demanded Quantity Supplied 200 4500 2000 250 4000 2700 300 3700 3100 350 3400 3400 400 3300 3800 500 3200 4100 a) Suppose that the minimum wage of drivers’ in the market is above the equilibrium wage. By using the demand and supply diagram of the drivers’ market, show the equilibrium wage, the number of employed workers, number of unemployed workers. Also show the total wage payments to drivers. b) Now suppose that the labor secretary is considering a raise in the minimum wage. Explain briefly what would be the effect on unemployment and employment? c) Let’s assume that the demand for drivers was inelastic, what would you propose to increase the minimum wage or lower total wage payments to drivers? Explain briefly why d) Suppose the labor secretary revise the minimum wage at 300 OMR, how do you see this decision?
Below tables shows the data on labor market of Drivers in Muscat city of Oman. Wage rate Monthly in OMR Quantity Demanded Quantity Supplied 200 4500 2000 250 4000 2700 300 3700 3100 350 3400 3400 400 3300 3800 500 3200 4100 a) Suppose that the minimum wage of drivers’ in the market is above the equilibrium wage. By using the demand and supply diagram of the drivers’ market, show the equilibrium wage, the number of employed workers, number of unemployed workers. Also show the total wage payments to drivers. b) Now suppose that the labor secretary is considering a raise in the minimum wage. Explain briefly what would be the effect on unemployment and employment? c) Let’s assume that the demand for drivers was inelastic, what would you propose to increase the minimum wage or lower total wage payments to drivers? Explain briefly why d) Suppose the labor secretary revise the minimum wage at 300 OMR, how do you see this decision?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
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Below tables shows the data on labor market of Drivers in Muscat city of Oman.
Wage rate Monthly in OMR
Quantity Demanded
Quantity Supplied
200
4500
2000
250
4000
2700
300
3700
3100
350
3400
3400
400
3300
3800
500
3200
4100
a) Suppose that the minimum wage of drivers’ in the market is above the equilibrium wage. By using the demand and supply diagram of the drivers’ market, show the equilibrium wage, the number of employed workers, number of unemployed workers. Also show the total wage payments to drivers.
b) Now suppose that the labor secretary is considering a raise in the minimum wage. Explain briefly what would be the effect on unemployment and employment?
c) Let’s assume that the demand for drivers was inelastic, what would you propose to increase the minimum wage or lower total wage payments to drivers? Explain briefly why
d) Suppose the labor secretary revise the minimum wage at 300 OMR, how do you see this decision?
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