Tasks: The graph above represents the market for unskilled labor. Answer the fol

Question

Tasks:

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

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

2. 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?

3. 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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