Tool tip: Use your mouse to drag the horizontal green line on the graph. The val
ID: 1234122 • Letter: T
Question
Tool tip: Use your mouse to drag the horizontal green line on the graph. The values in the calculator on the right side of the graph will change accordingly. You also can directly change the value in the calculator by clicking in the box and typing. The graph and any related values will change accordingly. In this market, the equilibrium hourly wage is _____, and the equilibrium quantity of labor is _____ workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $10. At a wage of $10 per hour, the quantity of labor firms will demand is _____ workers, whereas the quantity of labor workers will supply is _____ workers. Therefore, there will be _____ of _____ workers in this market. In the absence of any price controls, this will exert _____ pressure on wages until the labor market achieves equilibrium. However, with a price control in place, the labor market may or may not be able to reach its equilibrium. (Note: Economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage.) In this particular case, the minimum wage of $10 per hour _____ prevent the market from reaching the equilibrium you found above and _____ contribute to prolonged unemployment. The minimum wage causes _____ unemployment.Explanation / Answer
$8, 300 workers 225, 450, surplus supplied. downward, will, will, structural