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ECON 213 Problem Set 2

Problem set for an economics course.

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    ECON 213 Page 1 of 4 ECON 213 P ROBLEM S ET 2 Name: ___ ___________ Problem Set 2 is to be completed by 11:59 p.m. (ET) on Monday of Module/Week 4. 1. The following table presents data for wages in the market for internet security professionals. (HINT: in the labor market the roles are reversed. Those who want t o hire labor are the demanders. The workers enter the work force providing labor to the market place so they are the suppliers.) Wage Quantity Demanded Quantity Supplied $50,000 20,000 14,000 $60,000 18,000 18,000 $70,000 16,000 22,000 $80,000 14,000 26,000 $90,000 12,000 30,000 What is the equilibrium wage? _____ $60,000 ______________________________ Now, consider this scenario: Due to an increase in the internet security threats, the government wants to apply a price control in this market to encourage more people to become internet security professionals. Assume that a wage control is set at $75,000. Will this increase the number of people entering this labor market? Why or why not? Will this increase the number of people hired? Why or why not? There would be an increase of people looking to enter this labor market because of the wage control set in place. However, they will not be able to find work because there will be fewer jobs available because employers are forced to pay more many to employees. This means that the number of people hired will decrease because employers need to pay fewer people more money due to the wage control. Thus, ultimately, the number of people entering this specific wage market will not increase. 2. Assume you are a policymaker in Washington DC. Lobbyists for the preschoolers of America have put pressure on their representatives to cap prices on graham crackers. You have been assigned a position on a new committee to study the impact of a pri ce ceiling on graham crackers.

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