Finally, imagine that the state of California passes a law making public colleges tuition free, and many fast food workers leave the labor market in order to pursue higher education.h) Describe how this will impact the market for fast food workers. Which curve shifts and in which direction? Illustrate an example of that shift on the graph (don't worry about specific numbers - just increase/decrease the appropriate curve). What will happen to the equilibrium wage and the quantity of hours (will each increase or decrease)? i) If the minimum wage remains $35, how will this change in the market impact the outcome? (What happens to the disequilibrium situation? To the number of workers employed?)

1] Unit 1: Minimum Wage [10 points] Suppose that the graph below depicts the market for fast food workers in San Francisco. The wage shown is hourly and the quantity is measured in thousands of hours worked. a. What is the equilibrium wage? Hourly Wage $4 5 $4 0 5 What is the equilibrium quantity of hours 335 worked? S3 0 S2 5 b. The current minimum wage in San 320 Francisco is $18.07 per hour. Is the 31 5 minimum wage binding for food-service workers? How do you know? 51 0 $5 91 0 100 200 300 400 500 600 Food-servica workers (thousands of hours) Suppose that the City of San Francisco decides the cost of living is too hi gh, and raises the minimum wage to $30 per hour. c. What will happen to the quantity of hours worked with the minimum wage in place? d. What disequilibrium situation is created, and what is its magnitude? What does that disequilibrium situaiion mean in practical terms? [i.e. what does this mean in the context of a labor market?) Econ 221 P55 Spring 2023 e. What is the policy goal of minimum wage? Is that goal achieved in this example? f. Who benets and who is hurt by this policy? g. With that in mind. briey describe the tradeol'f the government is weighing when it raises the minimum wage. What are the benets, and what are the downsides