in this market, the equilibrium hourly wage is $10, and the equilibrium quantity of labour is 450 workers…

in this market, the equilibrium hourly wage is $10, and the equilibrium quantity of labour is 450 workers. suppose a senator introduces a bill to legislate a minimum hourly wage of $6. this type of price control is called a. for each of the wages listed in the following table, determine the quantity of labour demanded, the quantity of labour supplied, and the direction of pressure exerted on wages in the absence of any price controls. wage (dollars per hour) labour demanded (thousands of workers) labour supplied (thousands of workers) pressure on wages 8 12 true or false: a minimum wage above $10 per hour is a binding minimum wage in this market.

in this market, the equilibrium hourly wage is $10, and the equilibrium quantity of labour is 450 workers. suppose a senator introduces a bill to legislate a minimum hourly wage of $6. this type of price control is called a. for each of the wages listed in the following table, determine the quantity of labour demanded, the quantity of labour supplied, and the direction of pressure exerted on wages in the absence of any price controls. wage (dollars per hour) labour demanded (thousands of workers) labour supplied (thousands of workers) pressure on wages 8 12 true or false: a minimum wage above $10 per hour is a binding minimum wage in this market.

Answer

Brief Explanations:

  1. A price - control setting a minimum price is a price floor. Since the proposed minimum wage of $6 is below the equilibrium wage of $10, it is non - binding.
  2. In a labor market, when the wage is below the equilibrium wage, the quantity of labor demanded is higher than the quantity of labor supplied, putting upward pressure on wages. When the wage is above the equilibrium wage, the quantity of labor supplied is higher than the quantity of labor demanded, putting downward pressure on wages.
  3. A binding minimum wage is one set above the equilibrium wage.

Answer:

  1. This type of price control is called a price floor.
  2. For a wage of $8 per hour:
    • Labour Demanded: More than 450 (thousands of workers) (as wage is below equilibrium, demand is higher)
    • Labour Supplied: Less than 450 (thousands of workers) (as wage is below equilibrium, supply is lower)
    • Pressure on Wages: Upward
  3. For a wage of $12 per hour:
    • Labour Demanded: Less than 450 (thousands of workers) (as wage is above equilibrium, demand is lower)
    • Labour Supplied: More than 450 (thousands of workers) (as wage is above equilibrium, supply is higher)
    • Pressure on Wages: Downward
  4. True or False: A minimum wage above $10 per hour is a binding minimum wage in this market. Answer: True