
-The figure above illustrates the current market for workers in Lima, Peru.
a) Without any government intervention, what is the equilibrium wage rate and amount of employment?
b) If the city government imposes a minimum wage of $3 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?
c) If the city government imposes a minimum wage of $6 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?
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