In the country of Macroland, the labor market is represented by the following equations: Q D =
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In the country of Macroland, the labor market is represented by the following equations:
QD= 600 - 40W
QS= -50 + 60W
where Q is the quantity of Labor in millions of workers and W is the wage rate.
(a) Currently the minimum wage Law in Macroland is $10 per hour. Calculate, the number of labor supplied, the number of labor demanded, the number of unemployed and the unemployment rate.
(b) If Macroland eliminates the minimum wage law, what would happen to total employment, wage rate and the unemployment rate? 0
(c) In a clearly labeled graph, show your results for (a) and (b).
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