ECON 101 Study Guide - Quiz Guide: Minimum Wage Law, Demand Curve, Economic Surplus
hussam.sw and 39351 others unlocked
78
ECON 101 Full Course Notes
Verified Note
78 documents
Document Summary
Review questions # 3 (chapters 7 - 9: market research has revealed that demand for labor in vancouver is given by w. = 200 5l and the supply is given by w = 5 + l, where w = wage rate and l = Labor hour: calculate the equilibrium w and l of this market, the government thinks that the equilibrium wage is too low and wants to protect the workers by setting minimum wage at /hr. Solution: at equilibrium, 200 5l = 5 + l or, l* = 65/2 and. W* = 75/2 (b) since wmin > w*, it is binding and so will affect the labor market. , ld = 30 and ls = 45 (note these values can be found by plugging w = into demand and supply equations). Thus unemployment = ls - ld = 15. S d = 50ls =45ld=30 l* =65/2 w* =75/2200405unemployment35(c) before minimum wage law: