The figure to the right illustrates the demand curve (D) and the supply curve (s) for a labor market. The market equilibrium is initially at point e,. Suppose the supply of labor decreases. Show how this affects the labor market. 1.) Using the line drawing tool, show how the market supply of labor changes by drawing a new market labor supply curve. Label the line "S?." 2.) Using the point drawing tool, show the new market equilibrium wage and level of employment. Label this point "e,." Carefully follow the instructions above, and only draw the required objects. Quantity of labor Wage (dollars per hour)

The figure to the right illustrates the demand curve (D) and the supply curve (s) for a labor market. The market equilibrium is initially at point e,. Suppose the supply of labor decreases. Show how this affects the labor market. 1.) Using the line drawing tool, show how the market supply of labor changes by drawing a new market labor supply curve. Label the line "S?." 2.) Using the point drawing tool, show the new market equilibrium wage and level of employment. Label this point "e,." Carefully follow the instructions above, and only draw the required objects. Quantity of labor Wage (dollars per hour)

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 7PA

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Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?
When the supply curve is upward sloping, by practicing the minimum wage law a surplus is created in the economy. What happens when the labour supply curve is vertical? Does it still have a surplus? Surplus of what? Also, when a minimum wage law is imposed in the labour market, despite of the effects in the economy, why do the producers argue for a wage rise? Draw relevant diagram and discuss all the points raised above.!
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In a competitive labor market, the demand for and supply of labor determine the equilibrium wage rate and the equilibrium level of employment. Discuss the relationship between how these markets determine the wage rate and the quantity of labor that should be employed. Share an example, beyond your textbook, that demonstrates this relationship
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