There is only one labor market in Profunctia All workers have the same skills and all firms hire workers with these skills Use the accompanying diagram
There is only one labor market in Profunctia. All workers have the same skills, and all firms hire workers with these skills. Use the accompanying diagram, which shows the supply of and demand for labor, to answer the following questions. Illustrate each answer with a diagram. a. What is the equilibrium wage rate in Profunctia? At this wage rate, what is the level of employment, the size of the labor force, and the unemployment rate? b. If the government of Profunctia sets a minimum wage equal to $12, what will be the level of employment, the size of the labor force, and the unemployment rate? c. If unions bargain with the firms in Profunctia and set a wage rate equal to $14, what will be the level of employment, the size of the labor force, and the unemployment rate? d. If the concern for retaining workers and encouraging high-quality work leads firms to set a wage rate equal to $16, what will be the level of employment, the size of the labor force, and the unemployment rate? 6. A country’s labor force is the sum of the number of employed and unemployed workers. The accompanying table provides data on the size of the labor force and the number of unemployed workers for different regions of the United States. S Wage rate $20 10 Quantity of labor (thousands) 50 100 D 0 March 2007 March 2008 March 2007 March 2008 Northeast 27,863.5 28,035.6 1,197.8 1,350.3 South 54,203.8 54,873.9 2,300.9 2,573.8 Midwest 34,824.3 35,048.6 1,718.2 1,870.8 West 35,231.8 35,903.3 1,588.0 1,914.4 Source: Bureau of Labor Statistics. Region Labor force (thousands) Unemployed (thousands) a. Calculate the number of workers employed in each of the regions in March 2007 and March 2008. Use your answers to calculate the change in the total number of workers employed between March 2007 and March 2008. b. For each region, calculate the growth in the labor force from March 2007 to March 2008. c. Compute unemployment rates in the different regions of the country in March 2007 and March 2008. d. What can you infer about the rise in unemployment rates over this period? Was it caused by a net loss in the number of jobs or by a large increase in the number of people seeking jobs?