LS = -38+4W and LD = 95-3W
1. What is the value of employer surplus in this model?
2. What is the value of worker surplus in this model?
3. What is the value of dead weight loss in this model?
4. What is the change in total surplus based on the imposition of a wage ceiling at $17?
5. Generally, discriminatory employers might be thought of as which of the following?
A.Wage setters B.Utility maximizers C. Profit maximizers
6. Which of the following microeconomic tools aids monopsony employers in identifying the required wage level?
A. MR = MC B. MRPL = LDC. MRPL= MEL
Graphing Questions (Draw graphs on paper and take photos by smart devices. Each of the following should include the requested graphic AND a brief explanation/interpretation of what is being observed)
1. Provide a labor market model complete with graphic representations of worker and employer surplus when LS = -38+4W and LD = 95-3W. It is not necessary to calculate the values for ES, WS, etc. but you must show the areas of these surpluses/losses.
2. Form a separate model from that created in question 7 above, but using the same LS and LD equations, and show how worker and employer surpluses change based on the imposition of a wage ceiling at $17 - be sure to represent the area for dead weight loss and all values needed to calculate these changed areas and values. Again, it is not necessary to calculate the values for ES, WS, etc. but you must show the areas of these surpluses/losses.
3. Form a separate model from that created in question 7 above, but using the same LS and LD equations, and show how worker and employer surpluses might change in the face of a labor government imposed labor quota at 50. Along with this quota, the government has agreed to hire all workers not demanded by firms at the wage required by those workers.
Answer Questions: your answers should be no more than a short paragraph of 3-4 sentences for each of the following question
1. Provide a detailed description of the model impacted by the quota imposed in question 9, include calculations for ES, WS, and DWL (if any exists), and discuss how this type of policy might effect the economy and labor market.
2. Provide a brief description of Employer Surplus
3. Provide a brief description of dead weight loss.