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 18 Wage (Dollars per hour) Supp 16 406 bor Supplied Labor Demanded (Thousands of workers) 210 (Thousands of workers) 10 0 70 140 210 280 350 420 490 560 630 700 LABOR (Thousands of workers)

Explanation / Answer

In the market, the equilibrium hourly wage is $10 and the equilibrium quantity lf labour is 350 thousand workers.

A minimum hourly wage of $6 type of price control is called price floor.

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

wage labor demanded labor supplied pressure 8 385 280 upward 12 315 420 downward

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