Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 6.4, Problem 2RQ
To determine
The reason why the production quota is inefficient.
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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
False
Please no written by hand solution
Which of the following statements is not generally true of a production quota?
a. The market will not clear due to the excess supply of that good.
b. Consumer surplus increases when compared to the market before the quota.
c. Producer surplus may increase or decrease.
d. Some of the consumer surplus will be transferred to producers
Suppose a government imposes a quota on the sale of an agricultural commodity in an attempt to boost the welfare of producers. Will this policy be successful?
Chapter 6 Solutions
Macroeconomics
Ch. 6.1 - Prob. 1RQCh. 6.1 - Prob. 2RQCh. 6.1 - Prob. 3RQCh. 6.1 - Prob. 4RQCh. 6.2 - Prob. 1RQCh. 6.2 - Prob. 2RQCh. 6.2 - Prob. 3RQCh. 6.2 - Prob. 4RQCh. 6.2 - Prob. 5RQCh. 6.3 - Prob. 1RQ
Ch. 6.3 - Prob. 2RQCh. 6.3 - Prob. 3RQCh. 6.3 - Prob. 4RQCh. 6.3 - Prob. 5RQCh. 6.4 - Prob. 1RQCh. 6.4 - Prob. 2RQCh. 6.4 - Prob. 3RQCh. 6.4 - Prob. 4RQCh. 6.4 - Prob. 5RQCh. 6.5 - Prob. 1RQCh. 6.5 - Prob. 2RQCh. 6.5 - Prob. 3RQCh. 6.5 - Prob. 4RQCh. 6 - Prob. 1SPACh. 6 - Prob. 2SPACh. 6 - Prob. 3SPACh. 6 - Prob. 4SPACh. 6 - Taxes (Study Plan 6.3) 5. The table in the next...Ch. 6 - Prob. 6SPACh. 6 - Prob. 7SPACh. 6 - Prob. 8SPACh. 6 - Prob. 9APACh. 6 - Prob. 10APACh. 6 - Prob. 11APACh. 6 - Prob. 12APACh. 6 - Prob. 13APACh. 6 - Prob. 14APACh. 6 - Prob. 15APACh. 6 - Prob. 16APACh. 6 - Prob. 17APACh. 6 - Prob. 18APACh. 6 - Prob. 19APACh. 6 - Prob. 20APACh. 6 - Prob. 21APACh. 6 - Prob. 22APACh. 6 - Prob. 23APA
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Similar questions
- Which of the following is an example of a quota? a) The United States sets a minimum or maximum price that can be charged for baked goods. b)The United States limits the number of immigrants allowed to enter the country. c) The United States sets a limit on how many firms can operate in the market for cell phones. d) The United States imposes a regulation requiring consumers to be licensed before buying pens.arrow_forwardWhy was Rice Tarrification Law became a law in the Philippines?arrow_forwardThe effect of an import quota is to a. lower the price and the quantity of imports. b. raise the price and the quantity of imports. c. raise the price and reduce the quantity of imports. d. raise the quantity and reduce the price of imports.arrow_forward
- If the minimum wage is set A. equal to the equilibrium wage, it will create a shortage of labor. B. equal to the equilibrium wage, it will create a surplus of labor. C. below the equilibrium wage, it will create unemployment. D. below the equilibrium wage, it will create a shortage of labor. E. above the equilibrium wage, it will create unemployment.arrow_forwardExplain the pros and cons of imposing a minimum wage in a country and illustrate your arguments by using a graph for labor market (number of employees on the horizontal axis and the level of wage on the vertical axis).arrow_forwardEconomic theory suggests that an increase in the minimum wage will prompt firms to hire fewer low skill workers. true or falsearrow_forward
- According to the Heritage Foundation report, what are two possible negative effects of an increase in the minimum wagearrow_forwardIs the minimum wage a good policy? Should the government increase the minimum wage or maintain it at its current rate or abolish it altogether.arrow_forwardgive an explanation to the following statements: The higher the elasticity of supply in the labor market, the closer would budgetary expenditure be as a proxy for the social cost of a project.arrow_forward
- 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. If the demand and supply functions are given by Q = 25 - P and Q = -15 + P, where Q is in million hours and P is in dollars per hour, does the imposition of the minimum wage cause a deadweight loss in the market?arrow_forwardList the factors that increase or decrease resource demand.arrow_forwardThe imosition of a price ceiling on a market will result inarrow_forward
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