Consider a Kenyan labor market with the following demand and supply functions respectively:

Q_D = 200 – W AND and Q_S = 120 + W; 4- in; where Q_D is quantity of labour demanded;

Q_D is quantity of labor supplied and w• is the wage rate is USD in the market.

Required:

Calculate the market equilibrium  

Suppose the Kenya government introduces a minimum wage of USD 100 in this market, calculate the unemployment rate caused by the minimum wage in the economy 

 Use appropriate supply and demand diagrams to analyze the effects on the market equilibrium price and quantity traded of chicken, following:

A fall in the price of fish which is a substitute for chicken.[2 marks]

A successful advertising campaign by the government promoting the benefits of eating chicken. [2marks]

An outbreak of bird flu that leads the government to have a large proportion of the country's stock of chickens destroyed. [2 marks]

 

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