Question
this is a question about economics please draw all three diagram The supply and demand model is used to analyze decisions and interactions happening in
this is a question about economics please draw all three diagram
The supply and demand model is used to analyze decisions and interactions happening in labour markets. The objective of this model is to yield a prediction concerning the level of employment and wages that are likely to prevail in a market. Answer the following questions: a) What are the two determinants of labour demand? Discuss explicitly how they affect a firm's decisions on labour demand. b) Construct a diagram to describe an equilibrium in a labour market. Clearly label the axises, the curves and the key points in your diagram. c) Suppose that the government imposes a minimum wage which is higher than the equilibrium wage occurred in Part b), how would the market be affected? Draw a diagram to describe the effects of this policy. d) Based on your understanding about labour demand, suggest a possible strategy that the government could use to try to solve the problem arising in Part c). Show in a diagram how your suggestion would solve this problem. e) Point out the differences between the ultimate outcome of this labour market shown in Part d) and the initial equilibrium shown in Part b).
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