The unemployment caused by minimum wage would be larger if Question 2 options: both labor demand and labor supply are more elastic. minimum wage is set below the equilibrium wage rate. both labor demand and labor supply are perfectly inelastic. minimum wage is set equal to the equilibrium wage rate. both labor demand and labor supply are more inelastic

The unemployment caused by minimum wage would be larger if Question 2 options: both labor demand and labor supply are more elastic. minimum wage is set below the equilibrium wage rate. both labor demand and labor supply are perfectly inelastic. minimum wage is set equal to the equilibrium wage rate. both labor demand and labor supply are more inelastic

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section19.1: Elasticity: Part 1

Problem 3ST

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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.
Suppose Hinterland has been a closed economy (meaning there is no immigration from foreign countries and no international trade). The current labor force has 4 million skilled workers and 8 million unskilled workers. Both types of labor have perfectly inelastic supply curves, and the current skilled-unskilled wage ratio is 2.5. The elasticity of demand of skilled labor is -0.4, while the elasticity of demand of unskilled labor is -0.1. Suppose Hinterland allows a brief period of immigration, during which time 1 million skilled workers and 4 million unskilled workers migrate to Hinterland. Suppose there are no other changes to the economy. Approximately what is the new skilled-unskilled wage ratio? (Hint: The percent change in the wage ratio is approximately equal to the percent change in the skilled wage minus the percent change in the unskilled wage.)
Many unions attempt to raise the hourly wages received by their members by restricting the supply of workers firms can hire from. Assuming the demand for workers who belong to these unions is inelastic, this would cause: wages of individual union members and the total (combined) income of union members to increase. wages of individual union members to increase and the total (combined) income of union members to decrease. wages of individual union members and the total (combined) income of union members to decrease. wages of individual union members to decrease and the total (combined) income of union members to increase.
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	both labor demand and labor supply are more elastic.
	minimum wage is set below the equilibrium wage rate.
	both labor demand and labor supply are perfectly inelastic.
	minimum wage is set equal to the equilibrium wage rate.
	both labor demand and labor supply are more inelastic