The three diagrams below show the supply and demand for teenage babysitters in one local area. The initial supply curve is S 0 in all cases.
FIGURE 14-3
-Refer to Figure 14-3. Suppose the teenage babysitters in one local area are earning an equilibrium wage of $6 per hour. Now suppose that the local government imposes a minimum wage of $8 per hour for babysitters. Which diagram illustrates the new supply curve SA) for babysitters?

Question

The three diagrams below show the supply and demand for teenage babysitters in one local area. The initial supply curve is S 0 in all cases.
  FIGURE 14-3
-Refer to Figure 14-3. Suppose the teenage babysitters in one local area are earning an equilibrium wage of $6 per hour. Now suppose that the local government imposes a minimum wage of $8 per hour for babysitters. Which diagram illustrates the new supply curve SA) for babysitters?

Quizplus · Accepted Answer

The new minimum wage of $8 per hour means that babysitters will not be willing to work for less than $8 per hour. This means that the supply curve will shift to the left, as shown in diagram 1.

The Three Diagrams Below Show the Supply and Demand for Teenage