Question

In: Economics

Suppose the market demand and supply for labor hours in a segment of a labor market...

Suppose the market demand and supply for labor hours in a segment of a labor market affected by a minimum wage in a certain state is given by the table below.

Labor Hours Demanded

Hourly Wage

Labor Hours Supplied

72

$10

85

73

$9

80

75

$8

75

77

$7

70

79

$6

65

81

$5

60

Using the graph below, show the equilibrium wage and hours of labor in this market.

Suppose the state government sets a minimum wage of $9 per hour. Using the graph below, and beginning from the equilibrium you identified in a), demonstrate the effects of this minimum wage on; i) the quantity of labor supplied, and, ii) the quantity of labor demanded. Has the minimum wage raised or lowered the hours of labor employed? Explain.

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Expert Solution

Rahul Sunny answered 1 year ago
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