Assume that the (daily) demand (measured in hours of work) of unskilled labor

in a particular town is given by D(w) = 150 10w, where w denotes the hourly wage

rate. The supply of unskilled labor at the same location is given by S(w) = 5w.

(a) Plot the demand and supply curves on the same graph, having wages on the

vertical axis and hours of work (that is, labor) on the horizontal axis.

(b) What is the free-market equilibrium wage for unskilled labor in this town?

(c) Explain what would be the effect (if any) of a $12 per hour minimum wage man

date in this market. How much labor would be demanded at that wage? What

would be the supply of labor? Identify who benefits and who loses from such

measure and by how much. What can you say about the society as a whole: is it

 better or worse off (and by how much)? Draw a new graph and mark everything 

clearly on it.

Answer rating: 100% (QA)

a To plot the demand and supply curves well use the given equations Demand Dw 150 10w Supply Sw 5w L... View the full answer