Econ supply of labor.
Project: Your Supply of Labor Due by 11pm on Tuesday This module taught you about demand and supply and markets. One market that most people interact with is the labor market where we are usually the suppliers of labor. In some cases, we may become the demanders of labor if we are the ones doing the hiring. The purpose of this exercise if to help you relate the labor market to your own life. Your Supply of Labor 1. Consider the following table, which shows possible hourly wages in the left and hours of work per week in the right column. For each of the wages given, fill in the chart to show how many hours you would currently be willing to work per week at each wage. (To make this exercise work, you need to choose some number of hours greater than zero for each wage above $0.) Hourly Hours of Work Supplied Per Wage Rate Week by You $45 $40 $35 $30 $25 $20 $15 $10 $5 SO 2. There are 100 people exactly like you in the labor market (including you), Calculate the total supply of labor and fill out the table below. (Hint: Multiply the "Hours of Work Supplied Per Week by You" in the above table by 100.) Hourly Wage Hours of Work Supplied Per Rate Week in the Entire Market $45 $40 $35 $30 $25 $20 $15 $10 $5 SO 3. Now, suppose the hourly wage rate is $10. How many hours of labor would you be willing to supply at this wage based on the first table? 4. How many hours of labor will the total market (all 100 people) supply at the hourly wage rate of $10? 5. How much money will you earn per week if the hourly wage rate was $10? 6. How much money will the total labor supply (all 100 people) earn per week if the hourly wage rate was $10? 7. Now, suppose that the government passes a law setting the minimum wage of $15. How many hours of labor would you be willing to supply at this wage? 8. How many hours of labor would the total market (all 100 people) supply at the new wage of $15? 9. As wages rise, the quantity demanded of labor will fall. Suppose that at the $15 minimum wage, firms demand only half of the labor that is supplied at that wage. i.e. only 50 of the above 100 people have a job and these 50 people can work for however many hours they want. Assuming you still have a job and can still work for the number of hours you are willing to supply, how much will you earn per week? 10. Since half of the workers will lose their jobs and only 50 workers will be employed, what will be the total earnings in the labor market now? 11. Explain the effect of a minimum wage on (a) workers who still have jobs, (b) workers who are laid off, and (c) the total earnings of all workers
