ECON 213 Problem Set 2
Problem set for an economics course.
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ECON 213
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ECON 213
PROBLEM SET 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 to 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 price
ceiling on graham crackers.
Page 1 of 4
ECON 213
PROBLEM SET 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 to 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 price
ceiling on graham crackers.
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Document Details
University
Harvard University
Subject
Economics