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E202PracticeExam3.5

E202PracticeExam3.5 - raise enough money to pay for it that...

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8. (15 pts) Suppose the demand and supply curves for unskilled labor in the Corvallis labor market are shown in the figure below. By how much will the imposition of a minimum wage at $12 per hour reduce total economic surplus? Calculate the amounts by which employer surplus and worker surplus change as a result of the minimum wage. 9. (10 pts) Describe an earned-income tax credit for workers (and a tax on employers that would
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Unformatted text preview: raise enough money to pay for it) that would make both workers and employers better off than under the minimum wage. On my honor, as an Aggie, I have neither given nor received unauthorized aid on this exam. Signature _____________________...
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