Let's solve the problem step by step based on the information in the image. --- ## Step 1: Find the Equilibrium Wage and Quantity From the graph: - The equilibrium is where the **Supply** and **Demand** curves intersect. - Looking at the graph, the intersection occurs at: - **Wage = $8 per hour** - **Labor (Quantity) = 420 thousand workers** **Equilibrium hourly wage:** $8 **Equilibrium quantity of labor:** 420 thousand workers --- ## Step 2: Minimum Wage Legislation > Suppose a senator introduces a bill to legislate a minimum hourly wage of $8. This type of price control is called a __________. A minimum wage set **above** the equilibrium wage is a **binding price floor**. A minimum wage set **at or below** equilibrium is **non-binding**. Since $8 is **equal** to the equilibrium wage, this is a **non-binding price floor**. --- ## Step 3: Fill in the Table Use the graph to determine the labor demanded and supplied at different wage rates. ### For Wage = $14/hour: - **Labor Demanded:** Find where the demand curve intersects $14. - From the graph, at $14, Labor Demanded ≈ 180 thousand workers. - **Labor Supplied:** Find where the supply curve intersects $14. - From the graph, at $14, Labor Supplied ≈ 700 thousand workers. - **Pressure on Wages:** Since supply > demand, there is **downward pressure** on wages. ### For Wage = $8/hour: - **Labor Demanded:** From the graph, at $8, Labor Demanded = 420 thousand workers. - **Labor Supplied:** From the graph, at $8, Labor Supplied = 420 thousand workers. - **Pressure on Wages:** Market is at equilibrium, so **no pressure**. ### For Wage = $6/hour: - **Labor Demanded:** From the graph, at $6, Labor Demanded ≈ 540 thousand workers. - **Labor Supplied:** From the graph, at $6, Labor Supplied ≈ 270 thousand workers. - **Pressure on Wages:** Since demand > supply, there is **upward pressure** on wages. --- ### Table (Completed): | Wage ($/hr) | Labor Demanded (thousands) | Labor Supplied (thousands) | Pressure on Wages | |-------------|----------------------------|----------------------------|------------------------| | 14 | 180 | 700 | Downward pressure | | 8 | 420 | 420 | No pressure | | 6 | 540 | 270 | Upward pressure | --- ## Step 4: True/False Question > A minimum wage above $10 per hour is not a binding minimum wage in this market. - The equilibrium wage is $8. - A minimum wage **above $8** (e.g., $10 or $14) **is** binding because it is set above the equilibrium and will affect the market. **Therefore, the answer is:** **False** --- ## **Summary of Answers** 1. **Equilibrium hourly wage:** $8 2. **Equilibrium quantity of labor:** 420 thousand workers 3. **Minimum wage at $8 is called:** Non-binding price floor 4. **Table:** (see above) 5. **True/False:** False --- Let me know if you need any further explanation!