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  3. 2 now go back to the original supply and demand...

Question: 2 now go back to the original supply and demand...

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2. Now, go back to the original supply and demand equations: Ed 60 2*w Es =-10+5w Redraw these on a new graph, as you did in the above question Suppose that a minimum wage of S12/hr is now imposed. a) What is the quantity demanded at this new wage? What is the quantity supplied? How many workers are hired? How many jobs are lost? b) Show all of the above on your graph. Once again, with the minimum wage in place, suppose that the demand again changes to: c) Repeat part a) d) Repeat part b).

Consider the same demand curve for labor as in the above questions: Ed 60 2*w Using the equilibrium wage and employment from the above question, calculate the 3. a) elasticity of demand when the $12/hr minimum wage is imposed. Suppose that the demand curve was now Ed 80-4*w b) Verify that the equilibrium wage and employment levels are the same. c) Calculate the elasticity of demand for this new demand curve when the minimum wage is imposed. d) I hich of these would you expect the employment effect of the minimum wage to be larger? Briefly explain.

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