28 Why are workers with high skills and much experience not

28. Why are workers with high skills and much experience not affected by the minimum wage? a. They belong to unions. b. They are not legally guaranteed the minimum wage. c. They generally earn wages less than the minimum wage. d. Their equilibrium wages are well above the minimum wage. 29. What results from a tax placed on the sellers of blueberries? a. It increases costs, lowers profit, and shifts supply to the left (upward). b. It increases costs, lowers profit, and shifts supply to the right (downward). c. It reduces costs, raises profit, and shifts supply to the left (upward). d. It reduces costs, lowers profit, and shifts supply to the right (downward). 30. Market demand is given as QD = 60 - P. Market supply is given as QS = 3P. Which legally imposed price would constitute a binding price floor? a. $9 b. $13 c. $15 d. $18

Solution

(28) (d)

Higher-skilled people are most often paid efficiency wage that is above market-equilibrium wage rate determined for unskilled and less-educated workers.

(29) (a)

A tax on sellers effectively increases their cost and reduces the price received by sellers, lowering output, shifting supply curve leftward.

(30) (d)

In free-market equilibrium, QD = QS

60 - P = 3P

4P = 60

P = 15

Therefore, a binding price floor has to be higher than $15.