Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 12, Problem 9P
To determine
The effect of the minimum wage in an industry on the unskilled labor market and level of employment in a firm.
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(Figure: Labor Union Wages I) The figure represents a labor union with wage in dollars and quantity of labor in hundreds
of hours.
Wage 200
($) 180
160
140
120
100
80
60
40-
20
0
MR
MC
LD
10 20 30 40 50 60 70 80
Quantity of labor
If the labor union chooses to maximize profit, how many workers will it supply?
0 2,750
4,000
8,000
5,000
14. The figure shows the supply and demand for labor in the textile industry. In each of the following scenarios, identify the direction of the shift in either the supply or demand curve and state whether the resulting equilibrium wage and quantity increase or decrease.
What are the original equilibrium wage and quantity?
Immigration and layoffs from other jobs increase the population of textile workers.
A new technology for making self-printed T-shirts reduces the marginal product of labor for textile workers.
Using your knowledge and understanding of supply and demand analysis to graph the following and explain your graph:
(c) the trade union withdraws labour through a strike.
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