Equilibrium wage-employment if labor market is competitive

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Reference no: EM131076667

In a particular industry, labor supply is ES=20+w and labor demand is ED=60−4w, where E is the employment level and w is the hourly wage.

a) What are the equilibrium wage and employment if the labor market is competitive?

b) What is the unemployment rate? [Help: the unemployment rate is defined as the number of unemployed workers divided by the labor force, that is, the number of employed plus the number of unemployed workers.]

c) Suppose the government sets a minimum hourly wage of $10. How many workers would lose their jobs? How many additional workers would want a job at the minimum wage? What is the unemployment rate?

Reference no: EM131076667

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