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Practical Application of the Concem of Elasticig: Please read the question carefully and slowly. Draw the diagrams according to the instructions in the question. The

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Practical Application of the Concem of Elasticig: Please read the question carefully and slowly. Draw the diagrams according to the instructions in the question. The federal Government in Laia land decides to pass a minimum wage law. a! Suppose that the minimum wage is set above the equilibrium wage in the market for unskilled workers. Using a supply and demand diagram for market for unskilled workers with quantity of workers on the x axis and price of workers ( wages) on the y axis, show the market wage, the number of workers who are employed, and the number of workers who are unemployed. Also show the total wage payment to the unskilled workers (Hint: the total wage payment will be the amount of wage X the number of workers employed). Now suppose that the minster of labor proposes an increase in the minimum wage. What effect would this have on employment? Does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities or neither? Using different diagrams with different elasticities to prove your point. DO NOT DRAW ALL THE DIFFERENT ELASTICITIES ON THE SAME DIAGRAM. What effect would this have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities or neither? Using different diagrams with different elasticities to prove your point. DO NOT DRAW ALL THE DIFFERENT ELASTICITIES ON THE SAME DIAGRAM. If the demand for unskilled labor was relatively inelastic, would the proposed increase in the minimum wage by the labor minister raise or lower the total wage payment to unskilled labor in the economy. (keep in mind that the total wage payment: number of un skilled labor employed x wage level) How would answer to point d above change if the demand for unskilled labor was relatively elastic

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