Suppose the labour market is summarised as: Demand: P = 100-Q Supply: P = Q The government imposes a minimum wage. However, consumers (firms) are unsurprisingly unhappy with the increase in wages and are negotiating with labour unions to return to the equilibrium wage. The union will agree to this if firms offer a lump sum transfer to producers (workers) equivalent to the maximum firms are willing to give, $1069.5. How much was the minimum wage? a. $97 b. $81 c. $73 d. $87
Suppose the labour market is summarised as: Demand: P = 100-Q Supply: P = Q The government imposes a minimum wage. However, consumers (firms) are unsurprisingly unhappy with the increase in wages and are negotiating with labour unions to return to the equilibrium wage. The union will agree to this if firms offer a lump sum transfer to producers (workers) equivalent to the maximum firms are willing to give, $1069.5. How much was the minimum wage? a. $97 b. $81 c. $73 d. $87
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Transcribed Image Text:Suppose the labour market is summarised as:
Demand: P = 100-Q
Supply: P = Q
The government imposes a minimum wage. However, consumers (firms) are unsurprisingly unhappy with the increase in wages and are
negotiating with labour unions to return to the equilibrium wage. The union will agree to this if firms offer a lump sum transfer to producers
(workers) equivalent to the maximum firms are willing to give, $1069.5.
How much was the minimum wage?
a. $97
b. $81.
c. $73
d. $87
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