Many young, inexperienced workers begin their careers in the unskilled labor mar

Question

Many young, inexperienced workers begin their careers in the unskilled labor market. Some remain unemployed and some get a job%u2014either full time or part time.

The graph below represents the market for unskilled labor. Answer the following questions based on the graph shown below:

If the wage is not allowed to fall below $10 per hour, how many unskilled workers are unemployed?

The labor force is simply the number of employed workers plus the number of unemployed workers. At a minimum wage of $10 per hour, what is the size of the unskilled labor force?

Recall the calculation for the unemployment rate: unemployment rate = (unemployed/number of workers in the labor force). At a minimum wage of $10 per hour, what is the unemployment rate among unskilled workers?

Explanation / Answer

If the wage is not allowed to fall below $10 per hour, no. of unskilled workers unemployed= 500-350 = 150

At a minimum wage of $10 per hour, the size of the unskilled labor force = 700

At a minimum wage of $10 per hour, the unemployment rate among unskilled workers = 350/700 = 50%

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