3. Minimum wage and unskilled labor AaAa This graph shows the labor demand and l

Question

3. Minimum wage and unskilled labor AaAa This graph shows the labor demand and labor supply curves for unskilled labor that is covered by the federal minimum wage law WAGE CALCULATOR 12 Wage Dollars per hour] 10 Labor Demanded [Thousands of workers 40 Labor Supplied 20 Thousands of workers 20 30 40 50 60 QUANTITY OF LABOR Reset to litil Values Calculate Suppose the minimum wage is $10 per hour. Then the number of workers employed in the covered sector of unskilled labor is sector workers, and there is a surplus (excess supply) of workers in that

Explanation / Answer

When minimum wage is $10, the number of workers employed is 10 workers and there is a surplus of 40 workers.

[Reason: When wage = $10, quantity of labor demanded = number of workers employed = 10 and quantity of labor supplied = 50, therefore surplus labor = 50 - 10 = 40]

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