The demand for fast-food labor-hours is given by Q_D= max{0,400 - 10P}. The supply of such labor-hours is given by Q_S= max{0,-200+50P}, where P is the hourly wage.

In equilibrium, what will be the price of a labor-hour? How many labor-hours will be sold at this price? [2 points]

What is the consumer surplus in this market? [3 points]

What is the producer surplus in this market? [3 points]

California passes a law raising the minimum wage to $12/hour. How many labor-hours do consumers of labor-hours demand at this price? How many labor-hours are producers willing to supply at this price? What happens to the equilibrium quantity of labor-hours sold? Will there be a shortage of labor-hours or a shortage of employment opportunities? [10 points]

What is consumer surplus after the policy in (d) is implemented? What is producer surplus? Who is better off and who is worse off as a result of this policy? What is the deadweight loss from this policy? [7 points]