Firms' aggregate demand of labor is given by: P = 100 - 8Q. The supply

of labor in the market is given by: P = 10 + 2Q. The government sets a minimum wage of $40.

(1) (5 points) What is the unemployment level?

(2) (5 points) What is the consumer surplus and producer surplus without a minimum wage?

(3) (5 points) What is the consumer surplus and producer surplus with the minimum wage?

(4) (5 points) What is the welfare transfer from firms to workers and the total welfare loss due to

the minimum wage policy?