Due on Nov 5 at 11:59 PM CST Market for Labor 24 21 18 15 12 Wage (Dollars per h

Question

Due on Nov 5 at 11:59 PM CST Market for Labor 24 21 18 15 12 Wage (Dollars per hour) Supp 3.00 Labor Demanded 1,050 Labor Supplied 150 0 150 300 450 800 750 900 1050 1200 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $9.00. Then indicate whether this wage will resuit in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers. Labor Supplied (Thousands of workers) Labor Demanded Wage (Thousands of workers) Shortage or Surplus? $9.00 Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $9.00 Which of the following statements are true? Check all that apply. In this labor market, a minimum wage of $9.00 is binding If the minimum wage is set at $12.50, the market will not reach equilibrium. Binding minimum wages cause frictional unemployment. In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Explanation / Answer

Answer
Wage=$9
Labor demand=750 thousands
Labor supply=450 thousands
Shrortage=labor demand-labor supply=750-450=300 thousands
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Option first and fourth
The $9 minimum wage is binding
because it is lower than equilibrium wage.
and in the absence of price control, a shortage puts pressure on wages
because the equilibrium wage is above minimum wage.

the 12.5 is not binding wage because it is above equilibrium so if we set that then the market will reach equilibrium
binding minimum wage does not cause frictional unemployment is caused structural unemployment.

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