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Question 1
The labor supply and demand curves for workers in the fast food industry are given by: Qls = 980 + 2W and Qld = 1000 - 2W, where W is the wage paid to workers per hour; Qls is the quantity of labor supplied by workers, and Qld is the quantity of labor (in hours) demanded by firms.
a. Graph the supply and demand curves and find equilibrium wages and labor.
b. What will be the burden (on workers and firms) of a unit payroll tax of $0.50 per hour imposed on firms? What is the deadweight loss? Indicate them on the graph.
c. What would happen to the burden of the tax if the workers valued the tax $0.30 per worker hour? What is the deadweight loss? Indicate them on the graph.
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The manager of a two plant firm needs to decide how much to produce in each plant. According to an economist the demand curve for the firm's product was estimated to be P = 78 - 15Q, Q is equal to the output in plan 1 plus output in plant 2 such t..
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