Consider a perfectly competitive labor market in which the demand for labor is given by E...

Consider a perfectly competitive labor market in which the demand for labor is given by E = 24,000 – (2,000/3)W, and the supply of labor is given by E = –8,000 + 2,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage.

a. What is the equilibrium number of employee-hours each day? employee-hours each day In equilibrium, what was the dollar value of the additional output generated by the last employee-hour hired in the market? $

b. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after the imposition of this minimum wage? employee-hours each day The minimum wage will workers’ total earnings and will total economic surplus.

Expert Solution

Rahul Sunny answered 2 years ago

Consider a perfectly competitive market, with demand given by and supply given by The government imposes...

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