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Examine changes in wage rates for private

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Assess market data for private math tutors in Austin, Texas.

Examine changes in wage rates for private math tutors.

  • If the Students' Union sets the minimum wage for private math tutors at $5.50 an hour, how many tutors are employed and what wage rate do they earn?
  • Suppose the local government raises taxes on educational materials, making the operating cost of the tutors higher. How would this tax affect the wage rate of, supply of, and demand for tutors?
  • Suppose the government imposed a price ceiling on teacher wages. What effect would this have on new teacher employment?
  • What if the government imposed a price floor on teacher wages?

If a black market arises due to the new minimum wage rate, what wage rate might those tutors in the black market earn? Explain the impact of different types of taxes.  Explain the effects of price floors and price ceilings.

Reference no: EM131557537

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