Q1: The market for unskilled labour is represented by Q = 52,000 - 2,000w and Q = 6,000w - 8,000 where Q is the number of

workers per hour and w is the hourly wage rate.

a) What are the equilibrium wage rate and equilibrium quantity in this market? Show your calculations.

b) Suppose the government imposes a minimum wage of $6 per hour. What quantity of unskilled labour would be employed? Explain or show how you arrived at your answer.

c) Suppose instead the government imposes a minimum wage of $10.85 per hour. What quantity of unskilled labour would be employed? Explain or show how you arrived at your answer.

d) Suppose the government imposes a minimum wage of $10.85 per hour. What is the level of unemployment in the unskilled labour market? Explain or show how you arrived at your answer.

Q2: The market for beef is represented by Q = 28,000 - 1500P and Q = 2100P - 800 where Q is kilograms of beef and P is the price of beef per kilogram.

a) What are the equilibrium price and equilibrium quantity in this market?Show your calculations.

b) Suppose the government imposes a price ceiling of $10 per kilogram in this market. What quantity of beef would be exchanged? Explain or show how you arrived at your answer.

c) Suppose the government imposes a price ceiling of $5 per kilogram in this market. What quantity of beef would be exchanged? Explain or show how you arrived at your answer.

d) Suppose the government imposes a price ceiling of $5 per kilogram in this market. Does a shortage or a surplus of beef exist AND if yes, what is its size? Explain or show how you arrived at your answer.

Q3: The market for peanuts is represented by Q = 74,000 - 120P and Q = 150P - 12,400 where Q is tons of peanuts and P is the price of peanuts per ton.

a) What are the equilibrium price and equilibrium quantity in this market? Show your calculations.

b) Suppose the government imposes a quota of 37,000 tons of peanuts in this market. What is the equilibrium price of peanuts? Explain or show how you arrived at your answer.

c) Suppose the government imposes a quota of 30,800 tons of peanuts in this market. What is the equilibrium price of peanuts? Explain or show how you arrived at your answer.

d) Suppose the government imposes a quota of 30,800 tons of peanuts in this market. Does a shortage or a surplus of peanuts exist AND if yes, what is its size? Explain or show how you arrived at your answer.