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Suppose that initially there is no minimum wage law, and that the equilibrium wage for student workers is $13/hour. Further suppose that the equilibrium quantity
Suppose that initially there is no minimum wage law, and that the equilibrium wage for student workers is $13/hour. Further suppose that the equilibrium quantity of student workers employed is 500. (a) If the government enacts a $10/hour minimum wage, what impact will this have on the wage paid to student workers, the number of student workers employed, and unemployment of student workers? Illustrate with a diagram. (Be sure to label the axes, the labor supply and labor demand curves, equilibrium, and the minimum wage.) (b) Suppose instead that the government enacts a $15/hour minimum wage, what impact will this have on the wage paid to student workers, the number of student workers employed, and unemployment of student workers? Illustrate with a diagram. (Be sure to label the axes, the labor supply and labor demand curves, equilibrium, and the minimum wage.)
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