The labor market for low-skilled workers is assumed to be as follows:

Price (Wage, in $ / hour)

Quantity demanded

Quantity supplied

$8 -- 674 -- 1289

$7--775--923

$6--821--821

$5--992--799

$4--1256 --780

1. What is the equilibrium wage? _$______ What is the equilibrium number of workers hired? _______

1. Suppose Staunton passes a local minimum wage (for work done within the city limits) of $7 per hour.

1. What is the quantity supplied at a wage of $7? ______ What is the quantity demanded at a wage of $7? _______ What is the amount of excess supply (i.e. unemployment)? ___________

1. Plot the supply and demand curves in the space below. Indicate the price floor, the quantity supplied and the quantity demanded at a wage of $7, and the excess supply of labor.

Price

Quantity