Quiz: Ch 3 Quiz Time Remaining: 01:23:15 Submit Qui This Question: 2 pts 120f 15
ID: 1149218 • Letter: Q
Question
Quiz: Ch 3 Quiz Time Remaining: 01:23:15 Submit Qui This Question: 2 pts 120f 15 (7 complete) This Quiz: 22 pts possib Show Work Suppose that you have been hired to analyze wages in a simple market. The demand for labour and supply of labour can be represented by the following equations where L stands for the quantity of labour (measured in thousands of workers) and W stands for the wage rate (measured in dollars per hour: Demand: Supply: LD-100-3W LS-nr a. Calculate the equilibrium wage (price) and quantity of labour employed in this market b. A new employer enters the market causing labour demand to become: New Demand: LD-140-3w Calculate the new equilibrium wage (price) and quantity of workers employed in this market a. The competitive market equilibrum wage is S per hour Round your response to the nearest dollar The competitive market equilibrium quantity of abour is thousand workers. Round your response to the nearest whole number. b The new equilibrium wage is SL per hour Round your response to the nearest dollar) The new competitive market equilibium quantity of labour is thousand workers. (Round your response to the nearest whole number) Enter your answer in each of the answer boxes. 2Explanation / Answer
a)
Demand : Ld = 100 - 3W
Supply: Ls = 7W
At equilibrium : Demand = Supply
7W = 100 - 3W
W = 10 (equilibrium wage) and L = 70 thousand workers (equilibrium quantity of labour)
b)
New Demand : Ld = 140 - 3W
Supply: Ls = 7W
At equilibrium : Demand = Supply
7W = 140 - 3W
W = 14 (new equilibrium wage) and L = 98 thousand workers (new equilibrium quantity of labour)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.