The graph shows the market for tomato pickers in southern Ca

The graph shows the market for tomato pickers in southern California. If California introduces a minimum wage for tomato pickers of $ 16.00 an hour, how many pickers are employed and how many are unemployed? If California introduces a minimum wage for tomato pickers of $16.00 an hour, pickers are employed and pickers are unemployed. The lowest wage that some workers might be able to earn if a black market develops is $

Solution

If minimum wage is imposed at 16$,then from demand curve at wage rate 16$,pickers employed are 2250 and from supply curve,total supply of tomato pickers at wage rate 16$ is 3750.

Hence unemployed pickers are Total supply-employed=3750-2250=1500

At wage rate 8$,unemployed workers are again 3750-2250=1500

Hence in black market,8$ is the lowest wage that some workers might be able to earn.