Microeconomics Plus Myeconlab With Pearson Etext (1-Semester Access)
6th Edition
ISBN: 9780134435053
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 4.A, Problem 6PA
To determine
The impact of minimum wage on the labor market.
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draw a graph with this difinitions
To visualize the impact of the minimum wage on the labor market, I have created an original graph (see below). This graph depicts a hypothetical labor market before and after an increase in the minimum wage.
[Please insert your original graph here.]
In the graph, the x-axis represents the quantity of labor, and the y-axis represents the wage rate. The blue curve (labeled "Initial Equilibrium") represents the initial labor market equilibrium, where the supply of labor (S) intersects with the demand for labor (D) at point A, determining the initial wage rate and employment level.
The red curve (labeled "After Minimum Wage Increase") illustrates the impact of a minimum wage hike. When the government imposes a higher minimum wage, it acts as a price floor (represented by the horizontal line). This results in a new equilibrium at point B, where the wage rate is higher, but employment is lower compared to the initial equilibrium.
On page 104 of the third (2019) edition of Naked Economics by Charles Wheelan, Wheelan discusses the possible outcomes of minimum wage. Based on what Wheelan has written and the conversations about minimum wage in the class, which of the below statements is the LEAST likely to be correct if the minimum wage (a price floor) is placed well above the market clearing (equilibrium) wage?
Group of answer choices
The higher the minimum wage is set above the market clearing or equilibrium rate the more likely it is benefit all workers, as everyone's wages will have increased, and employers will not lay off workers because of the higher wages.
The higher minimum wage will benefit those who continue to have a job at the higher wage, but will hurt those who are laid off because employers will hire fewer workers at the higher wage rate.
In an era of global production and a global labor pool in which wages in the U.S. are higher than the wages paid to workers in countries such as Mexico, the…
Compare the three labor market graphs below, representing the supply and demand of low-skilled labor, medium-skilled labor, and high-skilled labor respectively. The y-axis is the price of labor ($ per hour) and the X-axis is the number of jobs (in 100,000 jobs). How will the impact of this increase in the minimum wage affect each of these markets?
Chapter 4 Solutions
Microeconomics Plus Myeconlab With Pearson Etext (1-Semester Access)
Ch. 4.A - Prob. 1RQCh. 4.A - Prob. 2RQCh. 4.A - Prob. 3RQCh. 4.A - Why would economists use the term deadweight loss...Ch. 4.A - Prob. 5PACh. 4.A - Prob. 6PACh. 4.A - Prob. 7PACh. 4.A - Prob. 8PACh. 4.A - Prob. 9PACh. 4 - Prob. 1TC
Ch. 4 - Prob. 2TCCh. 4 - Prob. 4.1.1RQCh. 4 - Prob. 4.1.2RQCh. 4 - Prob. 4.1.3RQCh. 4 - Prob. 4.1.4RQCh. 4 - Prob. 4.1.5PACh. 4 - Prob. 4.1.6PACh. 4 - Prob. 4.1.7PACh. 4 - Prob. 4.1.8PACh. 4 - Prob. 4.1.9PACh. 4 - Prob. 4.1.10PACh. 4 - Prob. 4.1.11PACh. 4 - Prob. 4.1.12PACh. 4 - Prob. 4.1.13PACh. 4 - Prob. 4.1.14PACh. 4 - Prob. 4.2.1RQCh. 4 - Prob. 4.2.2RQCh. 4 - Prob. 4.2.3PACh. 4 - Prob. 4.2.4PACh. 4 - Prob. 4.2.5PACh. 4 - Prob. 4.2.6PACh. 4 - Prob. 4.2.7PACh. 4 - Prob. 4.2.8PACh. 4 - Prob. 4.2.9PACh. 4 - Prob. 4.2.10PACh. 4 - Prob. 4.3.1RQCh. 4 - Prob. 4.3.2RQCh. 4 - Prob. 4.3.3RQCh. 4 - Prob. 4.3.4RQCh. 4 - Prob. 4.3.5PACh. 4 - Prob. 4.3.6PACh. 4 - Prob. 4.3.7PACh. 4 - Prob. 4.3.8PACh. 4 - Prob. 4.3.9PACh. 4 - Prob. 4.3.10PACh. 4 - Prob. 4.3.11PACh. 4 - Prob. 4.3.12PACh. 4 - Prob. 4.3.13PACh. 4 - Prob. 4.3.14PACh. 4 - Prob. 4.3.15PACh. 4 - Prob. 4.3.16PACh. 4 - Prob. 4.3.17PACh. 4 - Prob. 4.3.18PACh. 4 - Prob. 4.3.19PACh. 4 - Prob. 4.4.1RQCh. 4 - Prob. 4.4.2RQCh. 4 - Prob. 4.4.3RQCh. 4 - As explained in the chapter, economic efficiency...Ch. 4 - Prob. 4.4.5PACh. 4 - Prob. 4.4.6PACh. 4 - Prob. 4.4.7PACh. 4 - Prob. 4.4.8PACh. 4 - Prob. 4.4.9PACh. 4 - Prob. 4.4.10PA
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- How does the equilibrium price and quantity change when there are demands to increase wages? Are there any changes or none? Provide a graph of your answerarrow_forwardA case study in this chapter discusses the federal minimum-wage law. Suppose the minimum wage is $7 per hour in the market for unskilled labor, as shown on the following graph. Use the grey point (star symbol) to indicate the market equilibrium wage and quantity of labor in the absence of a minimum wage. Then use the purple point (diamond symbol) to indicate the level of employment at the minimum wage provided, and use the orange point (square symbol) to indicate the quantity of labor supplied at this minimum wage. Finally, use the green polygon (triangle symbols) to show the total wage payments to unskilled workers. Market EquilibriumMinimum Wage OutcomeLabor Supplied at Minimum WageTotal Wage Payments012345678910109876543210Wage (Dollars per hour)Quantity of Labor （Millions of workers)DemandSupplyMinimum Wage At the minimum wage of $7 per hour, the level of unemployment is million workers, and the total wage payments to workers are million. Now suppose the…arrow_forwardThe graph illustrates the hiring market for crane operators in the state of Florida. A workers' union has successfully petitioned the government to impose a minimum wage of W1 for crane operators. If the government lowers the minimum wage to W2, then Wage supply Rate W1 W2 demand Number of Crane Operators Image created by Steven Sproles for Virtual Virginia, 2020. Employment of crane operators will decrease because firms will be less willing to hire more workers at the new wage O Employment of crane operators will decrease because fewer crane operators will be willing to work at the new wage O Employment of crane operators will increase because more crane operators will be willing to work at the new wage Employment of crane operators will remain unchanged O Employment of crane operators will increase because firms will hire more workers at the new wagearrow_forward
- does imposing a living wage have the same outcome as a minimum wage?arrow_forwardWho should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Paideia. The equilibrium hourly wage is $10 , and the equilibrium number of laboratory aides is 150 . Suppose the federal government of Paideia has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that hay the tax is collected from each party). Use the graph input tool to evaluate these thret proposal5; Entering a number into the Tax Levied on Employers feld (inibialy set at adro dallars per hour) shilts the demand curve down by the amount you enter, and entering a number into the Tax Leviod on workers fieid (initially set at acro dollas per bour) shifts the supply curve up by the amount your enter. To determine the before-tax wage for each tar proposal, adjust the amcunt in the wage field unbil the quantity of labor supplied…arrow_forwardSummarize the evidence regarding the impact of the minimum wage on employment.arrow_forward
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