Labor Economics 5th Edition by George Borjas

تمرين 5

In a particular industry, labor supply is E S = 10 + w and labor demand is E D = 40 - 4 w, where E is the level of employment and w is the hourly wage.
a. What are the equilibrium wage and employment if the labor market is competitive What is the unemployment rate
b. Suppose the government sets a minimum hourly wage of $8. How many workers would lose their jobs How many additional workers would want a job at the minimum wage What is the unemployment rate