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9. Minimum wage legislation The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. WAGE (Dollars per hour) 20 16 14 12 10 B 2 supply, and Markets 0 0 Supply Demand 90 180 270 360 450 540 630 720 010 900 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
In this market, the equilibrium hourly wage is S Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a Wage Labor Demanded (Dollars per hour) (Thousands of workers) 8 12 and the equilibrium quantity of labor is For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted on wages in the absence of any price controls. True False thousand workers. Labor Supplied (Thousands of workers) Pressure on Wages True or False: A minimum wage below $10 per hour is a binding minimum wage in this market. (Economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage.) Grade It Now Save & Continue