Microeconomics Assignment on Minimum Wage and Labour Market

Running head: MICROECONOMICS
Microeconomics
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MICROECONOMICS
Table of Contents
Question1...................................................................................................................................3
Question 2..................................................................................................................................3
Question 3..................................................................................................................................3
Question 4..................................................................................................................................4
Question 5..................................................................................................................................5
Question 6..................................................................................................................................6
Question 7..................................................................................................................................7
Question 8..................................................................................................................................7
Question 9..................................................................................................................................8
Question 10................................................................................................................................8
Question 11................................................................................................................................9
Question 12................................................................................................................................9
References................................................................................................................................10

MICROECONOMICS
ECON111 Assignment
Question1
A minimum wage is an example of a price floor, it is a government regulation that makes
hiring labour services for less than a specified wage illegal such that an employee cannot give
a wage lower to the level defined. A minimum wage is not binding if set at an equilibrium
position but is considered to be binding if it is set above the “equilibrium wage”. The
uncertainty is only driven by the minimum wage policy undertaken (Sorkin 2015).
Question 2
The minimum wage as per Fair Work Commission’s “National Minimum Wage Order” is
$719.20 per week for an adult such that calculated for 38 hours in a week is $18.93 per hour
(employsure.com.au 2018).
Question 3
Equilibrium Wage Rate
D = 1,500,000 – 60,000W; S = 120,000W – 1,200,000
Demand = Supply at the equilibrium for labour market
1,500,000 – 60,000W = 120,000W – 1,200,000
180,000W = 2,700,000
W = 15
The diagram of the minimum wage and unskilled labour employed is given as:

MICROECONOMICS
The number of unskilled labour employed = 1,500,000 – 60,000W = 1,500,000 – 60,000(15)
= 1,500,000 – 900,000 = 600,000 unskilled employed labourers
Question 4