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Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee by $3 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labor. Wage (Dollars per hour) 8 18 16 14 12 10 40 2 0 Demand 1 2 3 4 5 6 7 8 Quantity of Labor (Thousands) Supply 10 True Suppose employees place a value on this benefit exactly equal to its cost. New Demand True or False: Employers and employees are made worse off by this law. New Supply Equilibrium Before Law Equilibrium After Law On the previous graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor. Suppose the wage is free to balance supply and demand. Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to indicate the equilibrium wage and level of employment after this law is implemented.

Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee by $3 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labor. Wage (Dollars per hour) 8 18 16 14 12 10 40 2 0 Demand 1 2 3 4 5 6 7 8 Quantity of Labor (Thousands) Supply 10 True Suppose employees place a value on this benefit exactly equal to its cost. New Demand True or False: Employers and employees are made worse off by this law. New Supply Equilibrium Before Law Equilibrium After Law On the previous graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor. Suppose the wage is free to balance supply and demand. Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to indicate the equilibrium wage and level of employment after this law is implemented.

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: Earnings And Discrimination
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Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee by $3 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labor. Wage (Dollars per hour) 20 18 16 14 12 10 8 2 0 0 Demand 1 2 3 4 567 Quantity of Labor (Thousands) Supply 9 10 True Suppose employees place a value on this benefit exactly equal to its cost. False New Demand Equilibrium Before Law True or False: Employers and employees are made worse off by this law. New Supply On the previous graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor. Suppose the wage is free to balance supply and demand. Equilibrium After Law Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to indicate the equilibrium wage and level of employment after this law is implemented.
Transcribed Image Text:Suppose that Congress passes a law requiring employers to provide employees some benefit (such as healthcare) that raises the cost of an employee by $3 per hour. Assume that firms were not providing such benefits prior to the legislation. On the following graph, use the green line (triangle symbol) to show the effect this employer mandate has on the demand for labor. Wage (Dollars per hour) 20 18 16 14 12 10 8 2 0 0 Demand 1 2 3 4 567 Quantity of Labor (Thousands) Supply 9 10 True Suppose employees place a value on this benefit exactly equal to its cost. False New Demand Equilibrium Before Law True or False: Employers and employees are made worse off by this law. New Supply On the previous graph, use the purple line (diamond symbol) to show the effect this employer mandate has on the supply of labor. Suppose the wage is free to balance supply and demand. Equilibrium After Law Use the black point (plus symbol) to indicate the equilibrium wage and level of employment before this law, and use the grey point (star symbol) to indicate the equilibrium wage and level of employment after this law is implemented.
Suppose that, before the mandate, the wage in this market was $2 above the minimum wage. In this case, the wage rate with the employer mandate will be $ in the level of unemployment. Now suppose that workers do not value the mandated benefit at all. per hour, which will lead to Which of the following statements are true under this circumstance? Check all that apply. The wage rate will decline by less than $3. Employees are worse off than before the mandated benefit. Employers are neither better nor worse off than before the mandated benefit. The equilibrium quantity of labor will remain unchanged. The supply curve of labor shifts to the left. 0 in the level of employment and
Transcribed Image Text:Suppose that, before the mandate, the wage in this market was $2 above the minimum wage. In this case, the wage rate with the employer mandate will be $ in the level of unemployment. Now suppose that workers do not value the mandated benefit at all. per hour, which will lead to Which of the following statements are true under this circumstance? Check all that apply. The wage rate will decline by less than $3. Employees are worse off than before the mandated benefit. Employers are neither better nor worse off than before the mandated benefit. The equilibrium quantity of labor will remain unchanged. The supply curve of labor shifts to the left. 0 in the level of employment and
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