Figure 15-1
-Refer to Figure 15-1. If the government imposes a minimum wage of $8, then unemployment will increase by

Question

Figure 15-1 
-Refer to Figure 15-1. If the government imposes a minimum wage of $8, then unemployment will increase by

Quizplus · Accepted Answer

At a wage of $9, the demand for labor is Qd=10,000-2000w, and the supply of labor is Qs=2000w. Setting these equal to each other gives us the equilibrium wage of $5 and the equilibrium quantity of workers of 5000. With a minimum wage of $8, the wage is now above the equilibrium wage, and the quantity of workers demanded decreases to 2000 while the quantity of workers supplied increases to 8000. The difference between the quantity of workers demanded and the quantity of workers supplied is the amount of unemployment, which is 8000-2000= 6000. Therefore, unemployment increases by 4000 workers.

Figure 15-1 -Refer to Figure 15-1. If the Government Imposes a Minimum