4. Minimum wage legislation The following graph shows the labor market in the fa

Question

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. Graph Input Tool Market for Labor in the Fast Food Industry 20 Wage (Dollars per hour) 6 Supp Labor Demanded (Thousands of workers) Labor Supplied (Thousands of workers) 900 378 14 Demand 4 0 90 180 270 360 450 540 630 720 810 900 LABOR (Thousands of workers) In this market, the equilibrium hourly wage is , and the equilibrium quantity of labor is thousand workers

Explanation / Answer

The equilibrium wage rate is =$10

The equilibrium quantity of labor employed is = 450 thousands of workers.

If the Senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called non-binding minimum wage. This is because this price control has been imposed below the market price.

A minimum wage below $10 per hour is a binding minimum wage in this market.

No, It is a false, statement because a minimum wage below $10 per hour is a non-binding minimum wage in this market.

Wage labor demanded labor supplied pressure on wages 12 225 495 wages tend to fall 8 675 405 wages tend to rise

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.