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Safari File Edit View History Bookmarks Window Help ng.cengage.com (27) TurboJet Scooter build #1-Jet/Chas. Illinols State University: ACC 168 008 F MindTap-Cengage Learning MINDTAP Assign. 4 9. Minimum wage legislation The following graph shows the labor market in the fast-food industry in the fictional town of Supersize Cty. 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 ertera value in white field, the graph and any orresponding amounts in each grey held wil·change accordingly. Graph Input Tool Market for Labor in the Fast Food Industry per hour) Labor Demanded Thousands of 120 Labor Supplied (Thousands of 80 20406080 100 120 140 160 180 LABOR (Thousands of workens) In this market, the equilibrium hourly wage is , and the equiibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $8. This type of price contrail is called a

Explanation / Answer

(1) Equilibrium is at intersection of labor demand and supply curves. So,

Equilibrium wage rate = $10

Equilibrium quantity of labor = 100 thousand

(2) Minimum wage is a Price Floor.

(3)

(4) TRUE

A price floor is binding when imposed above equilibrium price (here, $10).

Wage ($) Labor demanded Labor supplied Pressure on wage 14 60 140 Downward 6 140 60 Upward

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