s. a) If the govemment implements a minimum wage law,there win and who will lose
ID: 1105626 • Letter: S
Question
s. a) If the govemment implements a minimum wage law,there win and who will lose?Explain very brieftly (6 pes) Winners: will be winners and losers. Who will Losers (discuss at least two groups that will be hurt: b) (Not related to part a) The figure below shows the demand and supply curves for the almond market. The government sets thepricean Answer the following questions. Noespanton necessary (10 pts.). Price of (dollars Pe per ton) B c Price ceiling or Price floor? 4Quantihy of almonds i. What area(s) represent(s) consumer surplus after the imposition of the price control? i. What area(s) represent(s) consumer surplus transferred to producers after the price control? ii. What area(s) represent(s) producer surplus after the imposition of the price control? iv. What area(s) represent(s) the deadweight loss after the imposition of the price control? v. This price setting is binding. Is Ps a price floor or a price ceiling?Explanation / Answer
a) Winners are those workers who are able to get jobs at a higher wage. They might include the same workers who were previously working. Losers are employers who are nowpaying an increased wage bill as well as those who are now unemployed because they are not hired by the firms but were previously working at the market wage
b) CS is surplus of employers. It is now reduced to area 'A'.
CS which is now transfered to producers is area B
PS now becomes B + E
C + D is the area of deadweight loss
P3 is a price floor as it lies above the market wage.
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