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Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $7.50.
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $7.50.
Then indicate whether this wage will results in a shortage or a surplus. Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100,000 for 100 thousand workers.
Which of the following statements are true? Check all that apply.
___If the minimum wage is set at $10.50, the market will not reach equilibrium. ___In this labor market, a minimum wage of $7.50 is binding. __In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium. ____Binding minimum wages cause frictional unemployment.
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