ECON649_ECON991_Common_Assignment_S1_2017

# ECON649_ECON991_Common_Assignment_S1_2017 - ECON649 Due...

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ECON649 Due date: 12 May 1. (20 marks) Suppose that the market for labour is a competitive market and can be described by the following demand and supply curves: D = 120,000 – 5,000W S = 5,000W – 60,000 Where W = wage rate per hour for labour (a) (3 marks) Calculate the equilibrium wage rate and quantity of labour employed and draw a diagram to illustrate your answer. 考点： Equilibrium price and quantity Qs=Qd (b) (4 marks) Show on your diagram and calculate the size of the: (i) Consumer/firm surplus (ii) Producer/worker surplus (iii) Economic Surplus Note: the economic surplus is equal to the sum of consumer surplus and producer surplus. 考点： Surplus (c) (3 marks) Suppose that the government imposes a minimum wage of \$20.00 per hour. (i) How many workers are now employed?

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(ii) Calculate the amount of the surplus or shortage of workers created by the imposition of the minimum wage. 考点： Price floor (d) (5 marks) Calculate the size of the (i) consumer/firm surplus (ii) producer/worker surplus (iii) economic surplus and (iv) deadweight loss following the introduction of the minimum wage \$20.00 per hour.
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