The following graph shows the labor market in the fast-foodindustry in the fictional town of Supersize City.
Use the graph input tool to help you answer the followingquestions. You will not be graded on any changes you make to thisgraph.
Note: Once you enter a value in a white field, the graph and anycorresponding amounts in each grey field will changeaccordingly.
- 4 Minimum Wage Legislation The Following Graph Shows The Labor Market In The Fast Food Industry In The Fictional Town O 1 (26.67 KiB) Viewed 7 times
Suppose a senator introduces a bill to legislate a minimumhourly wage of $6. This type of price control is called aprice floor or quota or tax or price ceiling.
For each of the wages listed in the following table, determinethe quantity of labor demanded, the quantity of labor supplied, andthe direction of pressure exerted on wages in the absence of anyprice controls.
For each of the wages listed in the following table, determinethe quantity of labor demanded, the quantity of labor supplied, andthe direction of pressure exerted on wages in the absence of anyprice controls.
Wage
Labor Demanded
Labor Supplied
Pressure on Wages
(Dollars per hour)
(Thousands of workers)
(Thousands of workers)
True or False: A minimum wage below $10 per hour is a bindingminimum wage in this market.
True
False
WAGE (Dollars per hour) 20 18 16 14 12 10 8 00 0:0 2 0 + 0 Supply Demand 90 180 270 380 450 540 630 720 810 900 LABOR (Thousands of workers) Graph Input Tool Market for Labor in the Fast Food Industry Wage (Dollars per hour) Labor Demanded (Thousands of workers) 6 900 Labor Supplied (Thousands of workers) (?) 378