5. Minimum-wage laws and unemployment Consider the labor market defined by the supply and demand curves plotted on the following graph. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Graph Input Tool (? ) 24 Market for Labor 21 Supply Wage 3.00 (Dollars per hour) Labor Demanded 1,050 Labor Supplied 150 Thousands of (Thousands of workers) workers) WAGE (Dollars per hour) Demand 0 0 150 300 450 600 750 900 1050 1200 LABOR (Thousands of workers) Complete the following table with the quantity of labor supplied and demanded if the wage is set at $15.00. Then indicate whether this wage will result in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers. Labor Demanded Labor SuppliedHomework [Ch 28] 6 g 0 Demand a - + + I I a =. I . . . . . l 0 150 300 450 000 750 900 10501200 LABOR [Thousands of workers} Complete the following table with the guantlty of labor supplied andI demanded if the wage is set at $15.00. Then indicate whether this wage will result in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers. Labor Demanded Labor Supplied Wage ( Thousands of mrkers) { Thousands of workers) Shortage or Surplus? mm D E _. Suppose the federal government contemplates a new law that would create a national minimum wage of $15.00 per hour. Which of the following statements are true? Check all that apply. D If the minimum wage is set at $15.00, the market will not reach equilibrium. D Binding minimum wages cause structural unemployment. D In this labor market, a minimum wage of $11.50 would be binding. D In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium. Homework (Ch 28) Consider two hypothetical states that operate under different laws governing labor unions. The following graph shows the labor market in a state in the West. Initially, the market-clearing wage in this state is $8.00 per hour. Now, suppose that the General Assembly in this western state passes a law that makes it easier for workers to join a union. Through collective bargaining, the union negotiates an hourly wage of $10.00. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Graph Input Tool (? ) 16 Market for Labor 14 Supply Wage 2.00 (Dollars per hour) Labor Demanded 1,400 Labor Supplied 200 (Thousands of (Thousands of workers) workers Co WAGE (Dollars per hour) Demand N 200 400 600 800 1000 1200 1400 1600 LABOR (Thousands of workers) Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, union workers will be employed.WAG E (Dollars 4 Demand 2 - + + I I a I . . . . . I 0 200 400 000 800 1000120014001600 LABOR [Thousands of workers} Enter 31. [100 Into the box labeled Wage on the pre woos graph. Hint: Be sure to pay attention to the units used on the graph. At the union wager I:union workers will be employed. The following graph shows the labor market in a state in the East. Suppose the legislature in this state passes strong "rightto-work\" laws that make it very difcult for unions to organize workers, so the wage is always equal to the marketclearing value. Assume that with the exception of this difference in legislation, the western and eastern states are extremely similar. The initial position of the graph corresponds to the initial labor market condition in the eastern state before the labor union negotiated the new, higher wage for workers in the western state. Suppose that after the wage goes up in the western state, some workers in the western state lose their jobs and decide to move to the eastern state. Adjust the graph to showr what happens to employment and wages in the eastern state. Supply Demand Adjust the graph to show what happens to employment and wages in the eastern state. O Supply Demand Supply WAGE Demand LABOR Which of the following groups are worse off as a result of the union action in the western state? Check all that apply. Workers in the western state employed at the union wage The original workers in the eastern state Workers who find new jobs in the eastern state O All workers in the western state