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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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