Demand and Supply of Labour In Tutorial Library

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TITLE: Demand and Supply of Labour

CLASS / COURSE: Economics Questions

QUESTION DESCRIPTION: Suppose the demand for labour is W = 30 - .0018Ld and the supply of labour is W = 4 + .0008Ls a. At a wage of $20/hour, how many units of labour are demanded and how many units are supplied? How would you expect this market to adjust to this wage? Explain. b. What are the equilibrium values of the wage and the quantity of labour traded in this market? c. How much surplus do workers earn in this market and how much surplus do employers earn? d. Analyze the effects of the implementation of a $15/hour minimum wage in this market.

SOLUTION DESCRIPTION: Answer: Part a: W = $20/hour Demand W = 30 - .0018Ld 20 = 30 - .0018Ld .0018Ld = 30-20 Ld = 5555.56 Supply......

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