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Problem IV Consider a perfectly competitive labor market in which the demand for labor is given by E = 48,000-(2,000/3)W, and the supply of labor is given by E = -8,000 + 1,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage. a. What is the equilibrium number of employee-hours each day? b. Compute the employer surplus and the workers surplus c. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after the imposition of this minimum wage? d. What is the number of employee-hours per day hired and the number of employees e. Based on the question © Compute the employer surplus and the workers surplus f. Compute the dead weight loss in this labor market with minimum wage

Problem IV Consider a perfectly competitive labor market in which the demand for labor is given by E = 48,000-(2,000/3)W, and the supply of labor is given by E = -8,000 + 1,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage. a. What is the equilibrium number of employee-hours each day? b. Compute the employer surplus and the workers surplus c. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after the imposition of this minimum wage? d. What is the number of employee-hours per day hired and the number of employees e. Based on the question © Compute the employer surplus and the workers surplus f. Compute the dead weight loss in this labor market with minimum wage

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
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Problem IV Consider a perfectly competitive labor market in which the demand for labor is given by E = 48,000-(2,000/3)W, and the supply of labor is given by E = -8,000 + 1,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage. a. What is the equilibrium number of employee-hours each day? b. Compute the employer surplus and the workers surplus c. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after the imposition of this minimum wage? d. What is the number of employee-hours per day hired and the number of employees e. Based on the question © Compute the employer surplus and the workers surplus f. Compute the dead weight loss in this labor market with minimum wage
Transcribed Image Text:Problem IV Consider a perfectly competitive labor market in which the demand for labor is given by E = 48,000-(2,000/3)W, and the supply of labor is given by E = -8,000 + 1,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage. a. What is the equilibrium number of employee-hours each day? b. Compute the employer surplus and the workers surplus c. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after the imposition of this minimum wage? d. What is the number of employee-hours per day hired and the number of employees e. Based on the question © Compute the employer surplus and the workers surplus f. Compute the dead weight loss in this labor market with minimum wage
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