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4. In an economy, L; = 170 — 510, while L8 = 20 + 10w, where w is the hourly wage rate.
(a) What is the equilibrium level of employment and wage?
(b) If the present minimum wage is \$7.25/hr and the government raises it to \$7.50/hr, how many
workers will lose their jobs? What is the unemployment rate?
(0) If instead the government voted to raise the minimum wage to \$12/ hr, how many workers will lose their jobs? What is the unemployment rate?

a.Equilibrium level of employment is 120 and equilibrium wage is... View the full answer

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