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This scenario examines the market for fulltime unskilled labor (price is in $/hr, quantity is individual full time jobs). Suppose there are two types of
This scenario examines the market for fulltime unskilled labor (price is in $/hr, quantity is individual full time jobs). Suppose there are two types of people (A and B) with an observable difference (i.e. some visual trait) which has no impact on the quality of their labor. Suppose P = 2+QA,S represents group A's (inverse) labor supply, P = 2+2QB,S represents group B's (inverse) labor supply, and P = 2+ QA+B,S represents the market labor supply. Let P = 22 Q D represent the (inverse) market demand for labor. Assume employers select/ employ individuals from group A, over group B, if all other factors are equal (Le. pay). A) What is the equilibrium price and quantity in this market? Suppose a minimum wage law requiring employers to pay at least $12 / hr is imposed on this market. B) How many individuals of type A will be employed? C) How many individuals of type B will be employed
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