How do minimum wages affect wages, employment, and unemployment? In a competitive labor market, the demand for workers is given as QD = 10,000 - 100W, and the supply of workers is given as QS =  2,000 + 1,900W, where Q is the quantity of workers employed and W is the hourly wage. What is  the initial equilibrium wage and employment level? Suppose that the government decides that  $5 per hour is the minimum allowable wage in any market. How would this new minimum wage  alter this market? What would the new employment level be? What would happen to total payments to labor? Would there be any excess supply of labor? If so, how much?

true or false? The entrance of more workers into a particular labor market is likely to drive down the wage in that market

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?

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.)

Suppose the labor market is segmented into two distinct markets: the market for low-skill workers and the market for high-skill workers. Furthermore, suppose the competitive equilibrium wage in the low-skill market is $7.00/hour, while the competitive equilibrium wage in the high-skill market is $20.00/hour. If the minimum wage is set at $10.00/hour, which market will exhibit the greatest amount of unemployment? Demonstrate it graphically.

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.

Consider an economy that lacks any safety regulations. After a review of various incidences of workplace injuries, the government in this economy concludes that workers may not be optimally choosing jobs based on wages and safety. That is to say, workers seem to be accepting jobs that don't pay a high enough wage given the level of safety (or, put another way, jobs that aren't safe enough given the wage paid). This government is open to implementing new policies that would help workers make more optimal wage-safety choices. However, it strongly prefers avoiding the implementation of safety regulations on employers. For each of the following underlying causes of the wage-safety issue, describe a potential policy that could help resolve it. Given this government's aversion to implementing safety regulations, use "safety regulations" as a policy response to only one of these causes. a) Imperfect information among workers b) Imperfect competition between firms c) Workers experiencing the…

In 2015, many unskilled workers in the United States earned the federal minimum wage of $7.25 per hour. By contrast, average earnings in 2015 were about $23 per hour, and certain highly skilled professionals, such as doctors and lawyers, earned $100 or more per hour. a. If we assume that wage differences are caused solely by differences in productivity, how many times more productive was the average worker than a worker being paid the federal minimum wage? How many times more productive was a $100-per-hour lawyer compared to a worker earning minimum wage? b. Assume that there are 20 minimum-wage workers in the economy for each $100-per-hour lawyer. Also assume that both lawyers and minimum-wage workers work the same number of hours per week. If everyone works 40 hours per week, how much does a $100-per-hour lawyer earn a week? How much does a minimum-wage worker earn a week? c. Suppose that the government pairs each $100-per-hour lawyer with 20 nearby minimum-wage workers. If the…

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.

What happens to a supply curve when price changes but structural variables remain fixed? Provide an economic interpretation of this case.