Question
In: Economics
The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City.
4. Minimum wage legislation
The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Solutions
Expert Solution
The equilibrium hourly wage is $10 and quantity is 350 thousand
workers.
(It is determined at the intersection of labor demand and labor
supply curves)
Price control is called non binding price floor.
(As minimum wage is set which is price floor and it is set below
the equilibrium price so it is non binding)
Wage - $8
Labor demanded = 385
Labor supplied = 280
Pressure on wages = Upward
(Pressure on wages is to reach the equilibrium price)
Wage - $12
Labor demanded = 315
Labor supplied = 420
Pressure on wages = Downward
(Pressure on wages is to reach the equilibrium price)
False
(A binding minimum wage must be set above the equilibrium wage)
Rahul Sunny answered 2 years agoRelated Solutions
The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City.
The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City.
Minimum wage legislation The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City.
Minimum wage legislation The following graph shows the labor
market in the fast-food industry in the fictional town of Supersize
City. Use the graph input tool to help you answer the following
questions. You will not be graded on any changes you make to this
graph. Note: Once you enter a value in a white field, the graph and
any corresponding amounts in each grey field will change
accordingly. 0 30 60 90 120 150 180 210 240 270 300...
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