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Assume that the labor market for unskilled labor in a particular region is perfectly competitive (this...

Assume that the labor market for unskilled labor in a particular region is perfectly competitive (this is a bit unrealistic, as it assumes that all unskilled labor is homogeneous – but it’s a reasonably good approximation.) Let W be the wage rate (price of labor) and L be the number of workers. Suppose the demand for unskilled labor is given by WD = 20 – L and the supply of labor is given by WS = 5 + 0.5L

What is the equilibrium wage rate?

What is the equilibrium quantity of labor?

How much “consumer surplus” is there?

How much “producer surplus” is there?

Who gets the producer surplus in this market, employers or workers?

A minimum wage of $15 would cause which, a shortage or a surplus?

Unemployment occurs when there is which, a shortage or a surplus in the labor market?

How much, if any, unemployment would result from a minimum wage of $15?
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