Question
Government has a competitive labour market for government employees. A hypothetical equations for labour demand and labour supply are as follows: (QD) =7000 - 5W
Government has a competitive labour market for government employees. A hypothetical equations for labour demand and labour supply are as follows:
(QD) =7000 - 5W
(QS) = 625 + 10W
Where:
QD: Quantity Demanded
QS:Quantity Supplied
W: wage per week
a)What is the equilibrium level of employment?
b)Assume all workers agreed to join a union and they successfully obtained a wage increase to $500 per week (the demand curve is not affected). Calculate the number of workers employed after unionization.
c)How many workers are willing to work at this new wage of $500?
d)How many workers are unemployed at this new wage of $500?
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