Figure 1 shows the market for tomato pickers in southern California.

1. If California introduces a minimum wage of $4 an hour, how many tomato pickers are employed and how many are unemployed?

2. If California introduces a minimum wage of $8 an hour, how many tomato pickers are employed and how many are unemployed? What is the lowest wage that some workers might be able to earn if a black market develops?

3. If California introduces a minimum wage of $8 an hour, (a) is the minimum wage of $8 an hour efficient? (b) Who gains and who loses from the minimum wage of $8 an hour? Is it fair?

Transcribed Image Text:

FIGURE 1 Wage rate (dollars per hour) 10. 8 00 6 4 2 0 3,000 4,000 S D 5,000 Quantity (pickers)