Let total market demand for labor be represented by ED = 1,000 - 50w where ED is

Fantastic news! We've Found the answer you've been seeking!

Question:

Let total market demand for labor be represented by ED = 1,000 - 50w where ED is total employment and w is the hourly wage.

a. What is the market clearing wage when total labor supply is represented by Es = 100w - 800? How many workers are employed? How much producer surplus is received at the equilibrium wage?

b. Suppose the govemment imposes a minimum wage of $16. What is the new level of employment? How much producer surplus is received under the minimum wage?