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When 20 units are offered buyers are willing to pay

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Unformatted text preview: nits are offered, buyers are willing to pay $45 per unit, but the sellers cannot charge more than $25. Legally enforced price ceiling 20 units are sold at $25. Page 11 of 33 ©Prep101 www.prep101.com/freestuff Use the following table to answer questions 18: Wage (dollars per hour) 11 10 9 8 Labour supplied (hours per week) 5000 4000 3000 2000 Labour Demanded (hours per week) 2000 2500 3000 3500 Q18. Suppose the labour market is regulated and there is a minimum wage set at $10 per hour. If demand for labour increases by 1,500 hours per week at each wage level, unemployment _____ and the wage _____ . a) b) c) d) e) Will increase by 1,500 hours; will remain at $10 an hour Of 1,000 hours will be eliminated; will increase to $10 an hour Of 1,500 hours will be eliminated; will remain at $10 an hour Will increase by 1,000 hours; will remain at $10 an hour Will not affected; will decrease to $9 an hour Solution: c) Of 1,500 hours will be eliminated; will remain at $10 an hour At $10 per hour, 2,500 hours of labour is demanded and 4,000 hours of labour is supplied an excess of 1,500 hours of labour supplied or in other words, 1,500 hours of unemployment. Demand rises by...
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