Question

Below is data about the labor market in the state of Northwoods. Wage Quantity Demanded Quantity Supplied $10 80,000 120,000 $9 90,000 110,000 $8 100,000 100,000 $7 110,000 90,000 $6 120,000 80,000

If the state government imposed a minimum wage of $9, how many people would be unemployed?

Answer 1

So the number of people who would be unemployed is 111111.

Explanation:

We calculate the total number of people and how much money they will need:

`200000\cdot 10\$=2000000\$\\\\200000\cdot 9\$=1800000\$\\\\200000\cdot 8\$=1600000\$\\\\200000\cdot 7\$=1400000\$\\\\200000\cdot 6\$=1200000\$\\`

So the total number of people receiving a salary is 1000000.

A total of $ 8000000 is required for their salaries.

If the minimum wage is $ 9, we get:

`8000000:9=888888.8\\\\\\1000000-888888.8=111111.2\\`

So the number of people who would be unemployed is 111111.