The following factors could shift up the total Supply Curve of Labor, leading to a higher...

The following factors could shift up the total Supply Curve of Labor, leading to a higher wage in equilibrium, EXCEPT:

Question options:

	An increase in the value of leisure.
	An increase in Unemployment benefits.
	An increase in the number of people going into retirement.
	An increase in the Cost of college education.

Assuming perfect competition in the Labor Market, the following are likely effects coming from a Minimum Wage regulation, EXCEPT:

Question options:

	It will create a DWL
	It will reduce the number of jobs available.
	It will increase the level of unemployment in the economy.
	It will for sure benefit the workers that are the most in need.

Solutions

Expert Solution

1. An increase in the Cost of college education.

When cost of college education increases then people move to do jobs which increases supply of labor in the market and shifts supply curve downwards leading to fall in wage. All other options shifts supply leftwards.

2. It will for sure benefit the workers that are the most in need.

Minimum wage is set above equilibrium wage. Workers want to work but firms demand less so unemployment increases. It creates dead-weight loss. Unemployed people increases so it will not benefit workers who need most.

Rahul Sunny answered 1 year ago

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