12.1 The figure below displays a market for teenage labor with a minimum wage of $6 per hour. wage (S/worker) 8 7 6 5 4 3 2 1 Back to Page Cabor Supply Labor Demand 0 10 20 30 40 50 60 70 labor (ths. workers/hour) (a) How many workers are unemployed at the $6 minimum wage? (b) The government places an hourly tax of $1 per worker on employers. Show the effect of the tax on the demand for labor. (c) With both the minimum wage and the labor tax, how many workers do firms employ? What is the incremental effect of the tax on employment? (d) With both the minimum wage and the labor tax, how many workers are unemployed? What is the incremental effect of the tax on unemployment?

12.1 The figure below displays a market for teenage labor with a minimum wage of $6 per hour. wage (S/worker) 8 7 6 5 4 3 2 1 Back to Page Cabor Supply Labor Demand 0 10 20 30 40 50 60 70 labor (ths. workers/hour) (a) How many workers are unemployed at the $6 minimum wage? (b) The government places an hourly tax of $1 per worker on employers. Show the effect of the tax on the demand for labor. (c) With both the minimum wage and the labor tax, how many workers do firms employ? What is the incremental effect of the tax on employment? (d) With both the minimum wage and the labor tax, how many workers are unemployed? What is the incremental effect of the tax on unemployment?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Unemployment

Section: Chapter Questions

Problem 6CQQ

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