Suppose the graph depicts the labor market for retail associates in Nashville.

a. What is the equilibrium wage for retail associates? How many associates are employed at the equilibrium wage, and what is the unemployment rate?

b. The Tennessee state government enacts a minimum wage of $9 per hour. How many associates are employed at $9 per hour? Is there any unemployment?

c. Workers successfully lobby the state legislature, and the minimum wage is raised to $11 per hour. How many associates are employed at $11 per hour? Is there any unemployment? If so, are these workers frictionally, structurally, or cyclically unemployed?

Transcribed Image Text:

Wage per hour $11 $10 $9 1 1 02 4 Labor supply Labor demand 6 8 10 12 Thousands of workers Worth Publishers