The graph shows the market for private math tutors organized

The graph shows the market for private math tutors organized by the Students\' Union in College Station. What is the wage rate that private math tutors eam and how many private math tutors are employed? The wage rate that private math tutors carn is an hour and the number of private math tutors employed is When the Students\' Union sets the minimum wage for private math tutors at $ 10.00 an hour private math tutors are employed and they can an hour. The number of private math tutors unemployed is

Solution

Solution-

1. In order to determine the wage rate of private math tutors, first locate the point of equilibrium of Labor Supply curve (S) and Labor Demand curve (D). At this particular point in the graph, the wage rate depicted in Y Axis is 7,50 dollars per hour with 100 on X Axis depicting the number of math tutors employed.

Thus, wage rate is $7.50 per hour and and number of tutors employed is 100, which is correct as mentioned in the sheet.

2. When minimum wage rate of $10 per hour is set, as depicted in the graph the number of private math tutors being employed is 50 (see the labor demand curve-D). They earn $10 per hour.This is also correct,

3.At wage rate of $10 per hour, the number of private math tutors employed as depicted in the D curve or labor demand curve is 50 while the number of math tutors ready to work at this wage rate as depicted by the S curve or labor supply curve is 150. So number of people unemployed at $10 per hour wage rate is (150 -50) = 100. So, make necessary corrections in this part.