This type of price control is called a quota price floor pri

This type of price control is called a (quota, price floor, price ceiling, tax)

Pressure on wages 8 (upward, downward) 12( upward, downward)

The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool 20 Market for Labor in the Fast Food Industry Wa (Dollars per hour) Labor Demanded Thousands of 16 900 Labor Supplied 0 0 90 180 270 360 450 540 630 720 810 900 LABOR (Thousands of workers In this market, the equilibrium hourly wage is S and the equilibrium quantity of labor is thousand workers. Suppose a senator introduces a bill to legislate a minimum hourly wage of $6. This type of price control is called a For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of pressure exerted on wages in the absence of any price controls. Labor Supplied (Thousands of workers) Wage Labor Demanded (Dollars per hour) (Thousands of workers) Pressure on Wages 12 True or False: A minimum wage above $10 per hour is a binding minimum wage in this market. (Economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage) True False

Solution

Equilibrium wage is $10 per hour and Labour is 450 thousand of workers

Tis type of Price control is called Price ceiling as it is always effective below equillibrium Price

Answer for Part b

For $8 labour demanded is 630 and Labour supplied is 270 there is upward force

For $12 labour demanded is 180 and Labour supplied is 630 there is downward force

Answer for c

A minimum wage is binding if its placed above the equillibrium price i.e.$10 hence it is True here