Economic theory states that a wage set above the equilibrium will create a surplus of labor (unemployment). Are unions creating a surplus of labor? Explain your answer. Entrepreneurs absorb the risk of starting and running a company. Is Kennedy right about allowing employers to set the wage and not the employee? Explain your answer.

A labor union is an organization of workers that works for the welfare of workers and negotiates…

Answered: Economic theory states that a wage set…

Economic theory states that a wage set above the equilibrium will create a surplus of labor (unemployment). Are unions creating a surplus of labor? Explain your answer.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter12: The American Labor Force

Section: Chapter Questions

Problem 12AA

See similar textbooks

Related questions

Q: market for N-95 masks is perfectly competitive. Market Demand is given by Q=434-2P and Market Supply…

Q: When a government imposes a tax in a market, it allows the government to Question 9 options:…

A: Tax imposed on the good results in same changes irrespective of on whom the tax is imposed.

Q: Can you explain why I got this wrong? I thought that if the supply was more inelastic then the…

A: If the government imposes tax on labor income, the labor market would be affected. The supply of…

Q: Say the quantity supplied of corn is the same no matter the price of corn. If the government passes…

A: Because the quantity supplied does not change,it would be inelastic.Therefore burden of sales tax…

Q: Which policy increases the consumption of a good? a price floor/a price ceiling / a subsidy/ a tax

A: Consumption of goods and services is to satisfy the unlimited wants of the consumers. An increase in…

Q: Please answer these two questions using the information from above: The government wants to increase…

Q: The following equations describe the market for mapping printers in California: Demand: Price =…

A: The equilibrium is set up where the demand and supply are equal. The specific tax is imposed on the…

Q: Assuming that the long-run supply of housing is more _____ than the short-run supply, the imposition…

A: In the housing market, binding rent control is when government generally set maximum price to be…

Q: Consider a minimum wage law -- a law where the government requires businesses pay at least a certain…

A: The equilibrium wage rate and the equilibrium quantity of labor achieve where the demand curve for…

Q: A price ceiling is intended to benefit which group of people? consumers producers The…

A: Answer to the question is as follows:

Q: A decrease in the minimum wage contributes to reduce unemployment if the minimum wage is currently…

A: The minimum wage is the government determined wage rate that the employer in the economy should pay…

Q: Select the correct answer. When looking at rent control a price ceiling typically impacts: Group of…

A: A price ceiling is a limit set by the government or a group on how much a product, commodity, or…

Q: Consider a market with a perfectly elastic demand curve at p∗ = 1, 763 and a perfectly inelastic…

A: Consumer surplus is the difference between the price that the consumer is willing to pay and the…

Q: price floor will lead to a transfer of consumer surplus to producer surplus; a price ceiling will…

A: In a market, when government imposes price control, it may use price ceiling or price floor…

Q: Which of the following statement is true about binding price ceiling? (a) The shortage created by…

A: When the government sets a required price on a good or goods at a price below equilibrium it leads…

Q: Graphically show how each of the following shifts the supply curve. Also identify which factor of…

A: Supply curve is a graphical representation of the quantity of commodities or services supplied by…

Q: If the price floor is not enforced, firms competition will force the price ______________________.…

A: The equilibrium price and quantity in a market are determined by the forces of demand and supply.…

Q: What is a black market? Group of answer choices It is an illegal market that emerges when binding…

A: Black market: Black market may arises due to price control , black market can be defined as the…

Q: Assume the market wage in industry A is $9/hour. If the government increases the minimum wage from…

A: Minimum wage is a price floor implemented by the government usually with the aim of increasing…

Q: If the minimum wage is set A. equal to the equilibrium wage, it will create a shortage of labor.…

A: Answer- above the equilibrium wage, it will create unemployment.

Q: If the government imposes a minimum wage which is lower than the equilibrium wage rate in the market…

A: A labor market refers to the platform where households supply labor to earn wages while producers…

Q: Which of the following is an example of implicit costs? A. payments made by the firm to others…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following did the author suggest might disguise the employment effects of raising the…

A: Raising the lowest pay permitted by law would build the expense of utilizing low-wage workers.…

Q: Suppose the market for ice cream is characterized by a downfall sloping demand curve and an upward…

A: In a market for icecream, demand curve is downward sloping and supply curve is upward sloping.

Q: In Camarillo, when the demand for electricians ___________ slower than does supply of electricians,…

A: In the labor market, any change in demand or supply of labor will have a significant impact on the…

Q: Using the demand and supply analysis, illustrate the graph and explain what might happen to the…

A: In a market, the intersection of the demand and the supply determines the quantity and the market…

Q: Explain what minimum wages are, and what the results of the implementation and enforcement of…

A: Introduction: Demand-side economics holds that tax breaks for the wealthy do not benefit the…

Q: The market for N-95 masks is perfectly competitive. Market Demand is given by Q=398-2P and Market…

A: Given: Q=389-2P Q=3p Price Floor=$133 Now,Equilibrilium Price will be achieved when:Quantity…

Q: Draw a FULLY labeled graph that shows the welfare effects of imposing a binding price ceiling in the…

A: Introduction Consumer surplus is the consumer's gain which he get from exchange. It is the…

Q: Economic theory states that a wage set about the equilibrium will create a surplus of labor. Are…

A: Surplus of labor implies unemployment in the market due to the oversupply of labor. Labor unions…

Q: How does a Tax on Production affect a negatively sloped Demand curve or the Supply Curve? The supply…

A: When there is a change in the price of good, it makes movement along the demand or supply curve.…

Q: For each of the wages listed in the following table, determine the quantity of labor demanded, the…

A: Answer: According to the graph, the labor demand and labor supply curve intersect each other at a…

Q: ue/False: To calculate producer surplus, one finds the area under the demand curve and above the…

A: Producer surplus refers to the difference between the amount the seller is willing to supply goods…

Q: give an explanation to the following statements: The higher the elasticity of supply in the…

A: The supply elasticity is the ratio of the percentage change in quantity supplied to the percentage…

Q: About the consumer and producer surplus, answer the following questions: a. What is the value of the…

A: The quantity demanded of a good is defined as the amount of the good consumers are willing and able…

Q: After economics class one day, your friend suggests that taxing food would be a good way to raise…

A: A regressive tax is a type of tax that is imposed in a manner that the tax rate reduces with the…

Q: There are two taxes proposed at the city council meeting: Policy A and Policy B. If raising taxes…

A: If raising taxes through Policy A produces MORE economic surplus than raising taxes through Policy…

Q: minimum price for beef in 2008. If the market equilibrium price was below the government’s minimum…

A: Price floors are used by government to protest farmers and producers to ensure that market price…

Q: Rent control aims to limit landlords from imposing high rents. A rent control is an example of a: *…

A: Rent control is implemented by the government to prevent the landlords from exploiting the people by…

Q: Producer surplus is the difference between Group of answer choices the price the producer receives…

A: Producer surplus (PS) is obtained by subtracting the price at which sellers are willing and able to…

Q: What are the possible reasons why the government may make a market intervention? What are the…

A: The intervention by the government is the action taken by the government which can change the…

Q: If the government thinks the equilibrium wage is too low, it may impose a _________________ wage…

A: When the labour supplied in the economy equals labour demanded then it reaches in equilibrium and…

Q: Which of the following is a challenge of government setting a price floor? A risk of excess supply…

A: Market is in equilibrium when demand is equal to supply in free market. When government intervenes…

Q: The difference between a tax and a subsidy is when the government places a tax on the producers of a…

A: We have to find tax and subsidy .

Q: Which of the following best describes the idea of market efficiency? Group of answer choices A…

A: Market Efficiency is described in three ways : Allocative informational, Operational

Q: Which group is a price floor intended to benefit? consumers producers The Government

A: Price floor is a minimum price at which a seller can sell a commodity.

Question

Economic theory states that a wage set above the equilibrium will create a surplus of labor (unemployment). Are unions creating a surplus of labor? Explain your answer.

Entrepreneurs absorb the risk of starting and running a company. Is Kennedy right about allowing employers to set the wage and not the employee? Explain your answer.

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

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!

SEE SOLUTION Check out a sample Q&A here

Step 1: Step 1

Step 2: Step 2

Step 3: Step 3

Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Entrepreneurs absorb the risk of starting and running a company. Is Kennedy right about allowing employers to set the wage and not the employee? Explain your answer.

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Minimum-wage laws and unemployment Consider the market for labor depicted by the demand and supply curves that follow. Complete the following table with the quantity of labor supplied and demanded if the wage is set at $12.50. Then indicate whether this wage will result in a shortage or a surplus. Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $12.50. Which of the following statements are true? Check all that apply. Binding minimum wages cause structural unemployment. in this labor market, a minimum wage of $9.50 would be binding. In the absence of price controls, a surplus puts downward pressure on wages until they fall to equilibrium. If the minimum wage is set at $12.50, the market will not reach equilibrium.
How would imposing a minimum wage below the market-clearing wage affect employment in a competitive labor market? Group of answer choices a. Employment would be unchanged because the market forces drive the wage to a higher level. b. Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work. there would be a shortage of labor c. Employment would increase because setting a minimum wage below the market wage would increase the quantity of labor demanded d. Employment would decrease because the quantity of labor supplied would decrease
Are unions creating a surplus of labor? Entrepreneurs asborb the risk of starting and running a company. Is Kennedy right about allowing emploers to set the wage and not the employee?
The graph above shows a labor market where the downward-sloping curve is firm demand for labor and the upward-sloping curve is the worker supply curve. The vertical axis shows the hourly wage and the horizontal axis shows the number of full-time workers. Suppose a minimum wage of $9 is instituted. How many unemployed workers will result from the minimum wage? (Note: An unemployed worker is anyone who wants to work but cannot find a job.)
true or false? The entrance of more workers into a particular labor market is likely to drive down the wage in that market
Entrepreneurs absorb the risk of starting and running a company. Is Kennedy right about allowing employers to set the wage and not the employee? Explain your answer.
In which case is the total amount of a payroll tax paid by employees through lower wages? Group of answer choices When the labor supply curve is horizontal. When the labor supply curve is vertical.. When the labor demand curve is vertical. When the labor supply curve is downward sloping at a 45-degree angle. When unemployment is widespread and the wage is above its market clearing level, a cut in employer payroll tax will Group of answer choices drive up wages but have little to no effect on employment and unemployment. increase employment, reduce unemployment, and have little effect on wages. be largely ineffective. benefit employers and have no effect on workers.
Using supply and demand analysis, show the effects a binding minimum wage in a labour market can have on wage and employment levels, VERY clearly.
A more elastic labor supply shows that hours worked is more responsive to changes in tax rates. True or false?
Proponents of the minimum wage argue that it will not reduce employment. Opponents argue the opposite. What factor determines who is correct in this debate, and under what condition will each side be correct? Use a diagram to explain your answer. Proponents of the minimum wage argue that it will not cause unemployment. Opponents argue the opposite. What two factors determines who is correct in this debate, and under what conditions will each side be correct? Use a diagram to explain your answer. Proponents of the minimum wage argue that it will not create deadweight loss. Opponents argue the opposite. Under what condition will each side be correct. In light of this, what do you conclude are the likely effects of a minimum wage?
Suppose a binding minimum wage is imposed on the labor market, then basic microeconomics predicts that, a shortage of labor will occur, hence unemployment increases. a surplus of labor will occur, hence unemployment increases. a shortage of labor will occur, hence unemployment decreases. a surplus of labor will occur, hence unemployment decreases.
The legislature in a state in the South passes strong "right-to-work" laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the northern and southern states are very similar.The initial position of a supply-and-demand graph corresponds to the initial labor market condition in the southern state before the labor union negotiated the new, higher wage for workers in the northern state.Suppose that after the wage goes up in the northern state, some workers in the northern state lose their jobs and decide to move to the southern state. Which of the following groups are better off as a result of the union action in the northern state? (select all that apply) a) The original workers in the southern state b) Workers in the northern state employed at the union wage c) Employers in the northern state d) Workers who find new jobs in the southern state