Walmart employs the majority of people in small rural town. It's demand for labor is given by QD=100-2P. The supply of labor is given by Qs=3P. If the labor market functioned as a competitive market, the wage rate (the price of labor) would be people would be employed, and the producer surplus would be
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- Consider the labor market, i.e. the market for hours of work. When analyzing labor markets, price is just the hourly wage (e.g. 10 dollars an hour), and quantity is the number of hours demanded (by firms) or supplied (by workers). Suppose the government imposes a minimum wage of $15 per hour. True or false? (i) If the inverse demand function is P = 100 -15Q + 0.5Q2, Q<=10, and the supply function is Q = P2/18, where Q is in million hours and P is in dollars per hour, the imposition of the minimum wage will cause the market quantity of work hours to increase. (ii) If the demand and supply functions are given by Q = 10 - P and Q = P, where Q is in million hours and P is in dollars per hour, there will be an excess demand for labor.In this market, the equilibrium hourly wage is ___, and the equilibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a . For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted on wages in the absence of any price controls. Wage Labor Demanded Labor Supplied Pressure on Wages (Dollars per hour) (Thousands of workers) (Thousands of workers) 8 12 True or False: A minimum wage above $10 per hour is a binding minimum wage in this market. True FalseIf there is a price ceiling of $5, there is a direct transfer of surplus from producers to consumers. The producer surplus transferred to those students who are able to continue to get tutoring is, in numerals, $_____.
- In a labor market, supply is composed of which of the following groups? a. Households b. Firms c. Government d. Animal Assume the following: price ceiling < equilibrium price Which term corresponds to the inequality above? a. surplus b. insufficient funds c. shortage d. utopia Assume that there is a shortage in a market that is not eliminated through the price mechanism. What will happen to this shortage in the long run? a. It will become smaller b. It will remain constant size c. It will become larger d. It will disappear because the market will cease to exist Assume that there is a shortage in a market that is not eliminated through the price mechanism, instead, people decide how the shortage is addressed. The outcome is likely to be a. unfair, but efficient b. fair, but inefficient c. fair and efficient d.…The imosition of a price ceiling on a market will result inThe market for low-skilled workers is highly competitive, due to the high numbers of low skilled individuals. If the labor supply is given by the equation QS = 10W and measured per hour, and the demand for labor is given by the equation QD = 240 − 20W. Where Q measures the quantity of labor hired (in thousands of hours). Answer the following: (d) After the implementation of the $9 minimum wage, in terms of surplus how much better off are low-skilled workers and how much worse off are employers? (e) If the minimum wage is set at $11 rather than $9 how does the deadweight loss and surplus change?
- which statement is correct A result of welfare economics is that the price of a product is considered to be the best price because it maximizes total surplus. A seller would be willing to sell a product only if the price received is less than the cost of production. Suppose that the equilibrium wage in the labor market is $8.00 per hour of labor. If a law increased the minimum wage from $7.25 to $10.00 per hour of labor, any possible increase in producer surplus would be smaller than the loss of consumer surplus. In a market, for any given quantity, the price on a demand curve represents the marginal buyer's willingness to pay.Robots become a strong substitute factor for human workers in producing Good A. At the same time, the licensing fees increase for human workers who produce Good A. What would happen to the market equilibrium quantity of labor and wage rate for specialized labor to produce A? A-The quantity of labor increases, and the wage rate increases. B-The quantity of labor decreases, and the wage rate increases. C-The effect on the quantity of labor is indeterminate, and the wage rate decreases D-The quantity of labor decreases, and the effect on the wage rate is indeterminate. E-The quantity of labor and the wage rate both remain constant.The demand curve for gardeners is G(D) = 19 – W, where G = the numberof gardeners, and W = the hourly wage. The supply curve is G(S) = 4 + 2 W . a. Suppose the town government imposes a $2 per hour tax on all gardeners. Indicate the effect of the tax on the market for gardeners.What is the effect on the equilibrium wage and the equilibrium number of gardeners hired? How much does the gardener receive? Howmuch does the customer pay? How much does the government receiveas tax revenue?
- Steve decides not to rent out his second home since he is not allowed to set the rate above $1000 per month even though he knows he could find renters willing to pay much more. Would this be an example of a price ceiling or a black market?Draw supply and demand curves for the labor market. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? If the current market wage is $10.50, how does the labor market adjust back to the equilibrium? If a minimum wage of $8.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? Using the supply and demand graph in part (a) above, illustrate the effect of the price control.The weekly quantity demanded of frozen pizzas in Decorah,IA as a function of price is shown in the graph below.The market price of frozen pizzas is $10,and at that price 600 pizzas are sold.Consumer surplus in this market is ________.