What is the equilibrium wage and the employment level

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In a particular industry, labor supply is Es = 10 + w and labor demand is Ed = 40 – 4w, where E is the level of employment and w is the hourly wage.

a. What is the equilibrium wage and the employment level if the labor market is competitive? What is the unemployment rate?

b. Suppose the government sets a minimum hourly wage of $8. How many workers would you expect to lose their jobs? What is the unemployment rate?

Reference no: EM13885976

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