00:02
Hello, let me start from part one.
00:07
Here we need to graph labor demand and labor supply curves for low wage labor.
00:15
So in y -axis we have wage and in x -axis we have labor hours.
00:29
Let me...
00:33
Okay, this will be our labor demand.
00:36
And a labor supply.
00:42
Here we have an equilibrium wage, free market wage would have been $6 .75 per hour.
01:00
This is the market or equilibrium wage and this will be the equilibrium quantity of labor, labor hour.
01:12
And here we have situation when there is the minimum wage.
01:20
So there is minimum wage which is $9.
01:26
So it's illegal to pay less than this wage.
01:34
So what do we have here? quantity supply of labor exceeds the quantity demanded.
01:44
So here we have quantity supplied and quantity demanded.
01:51
And yes, there is a labor surplus or unemployment.
02:01
So in the first part we have labor surplus.
02:11
So when the minimum wage is above the equilibrium market wage, there is labor surplus or labor unemployment.
02:26
This is surplus of labor.
02:35
So, as we can see, the real number of labor hours is this.
02:46
Here we have job losses...