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WAGE (Dollars per hour) 15 Labor Supply 12 0 200 400 600 Labor Demand 900 1000 QUANTITY (Thousands of workers) Graph Input Tool Labor Market Wage Rate (Dollars per hour) Labor Demanded (Thousands of workers) $11.1 260 Labor Supplied (Thousands of workers) 740 480 Surplus Labor (Thousands of workers) Labor Demand Shifters Tax Credit (Dollars per hour) ° ? Suppose the minimum wage in this economy is $11.10 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $11.10 per hour, the size of the unskilled labor force is workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Unemployed Labor Force x 100 workers, and unskilled At a minimum wage of $11.10 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an Initial tax credit of $0. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $11.10, unemployment of unskilled workers is higher with the tax credit versus without it. True False

WAGE (Dollars per hour) 15 Labor Supply 12 0 200 400 600 Labor Demand 900 1000 QUANTITY (Thousands of workers) Graph Input Tool Labor Market Wage Rate (Dollars per hour) Labor Demanded (Thousands of workers) $11.1 260 Labor Supplied (Thousands of workers) 740 480 Surplus Labor (Thousands of workers) Labor Demand Shifters Tax Credit (Dollars per hour) ° ? Suppose the minimum wage in this economy is $11.10 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $11.10 per hour, the size of the unskilled labor force is workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Unemployed Labor Force x 100 workers, and unskilled At a minimum wage of $11.10 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an Initial tax credit of $0. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $11.10, unemployment of unskilled workers is higher with the tax credit versus without it. True False

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 4P
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WAGE (Dollars per hour) 15 Labor Supply 12 0 200 400 600 Labor Demand 900 1000 QUANTITY (Thousands of workers) Graph Input Tool Labor Market Wage Rate (Dollars per hour) Labor Demanded (Thousands of workers) $11.1 260 Labor Supplied (Thousands of workers) 740 480 Surplus Labor (Thousands of workers) Labor Demand Shifters Tax Credit (Dollars per hour) ° ? Suppose the minimum wage in this economy is $11.10 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $11.10 per hour, the size of the unskilled labor force is workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Unemployed Labor Force x 100 workers, and unskilled At a minimum wage of $11.10 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an Initial tax credit of $0. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $11.10, unemployment of unskilled workers is higher with the tax credit versus without it. True False
Transcribed Image Text:WAGE (Dollars per hour) 15 Labor Supply 12 0 200 400 600 Labor Demand 900 1000 QUANTITY (Thousands of workers) Graph Input Tool Labor Market Wage Rate (Dollars per hour) Labor Demanded (Thousands of workers) $11.1 260 Labor Supplied (Thousands of workers) 740 480 Surplus Labor (Thousands of workers) Labor Demand Shifters Tax Credit (Dollars per hour) ° ? Suppose the minimum wage in this economy is $11.10 per hour. An unemployed worker is defined as someone who is willing to work at the prevailing wage but is unable to find employment. Because the minimum wage lies above the equilibrium wage, it is binding, which means it is also the prevailing wage. If the wage is not allowed to fall below $11.10 per hour, the size of the unskilled labor force is workers are considered unemployed. The unemployment rate is defined as the percentage of unemployed workers in the labor force: Unemployment Rate = Unemployed Labor Force x 100 workers, and unskilled At a minimum wage of $11.10 per hour, the unemployment rate among unskilled workers is approximately Recall that according to the article, a bill moving through the legislature would allow small businesses in Illinois to collect a tax credit to offset the additional cost of a higher minimum wage. The previous graph shows an Initial tax credit of $0. For simplicity, assume that small businesses are the primary demanders of unskilled workers, and they would receive a tax credit equating to $1 per hour. True or False: With a minimum wage of $11.10, unemployment of unskilled workers is higher with the tax credit versus without it. True False
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