Consider the labor market and specifically the demand and supply for unskilled workers. Assume that the market is competitive. The labor supply and labor demand curves are as follows:

Ls = 10W - 1,000

Ld = 3,000 - 10W

Where, L is measured in terms of number of workers and W is the wage rate paid to each worker per day (in Rs).

a. What is the market clearing wage and employment that would exist in equilibrium?

b. The current minimum wage for unskilled workers is Rs 180 per day. What impact does this minimum wage on the market?

c. The government is considering increasing the minimum wage to Rs. 220 per day. Calculate the impact of the proposed minimum wage on the quantity of labor that will be demanded and supplied at this revised minimum wage.

d. Calculate the producer surplus (workers' surplus) at the market clearing wage rate and under the proposed Rs 220 minimum wage.

e. What is the effect of the proposed minimum wage on individual workers vis--vis the net effect on unskilled workers as a whole? No additional calculations are required to answer this part of the question. Explain in brief.

f. How would this minimum wage policy differ from a minimum support price program for workers. Support prices are often used in agriculture but if a similar program was operationalized in the labor market would your answer to part (d) change? No additional calculations are required to answer this part of the question. Explain in brief.

g. Are either of the policies (minimum wage or price support) efficient from an economist's point of view? No additional calculations are required to answer this part of the question. Explain in brief.