Question

1. Suppose that labor supply is given by w=2N+3 and labor demand is given by w =-2N+23. What are the equilibrium wage (w: the price of a worker) and the number of workers (N: the number of workers)? What is the Employee (they are the producers of labor) and the Employer (they are the consumers of labor) Surpluses?

Answer 1

$$2N+3=-2N+23$$

$$4N=20$$

$$N=5$$

$$W=13$$

The labor producer's surplus is unclaimed labor skills. Sometimes this manifests itself in the form of hidden unemployment when employees are employed part-time. The surplus of the consumer of labor, that is, the employer, is the economically unjustified volume of hired workers, the amount of working time of which exceeds the required labor input for the production of products.