How can I show the impact of a NMW on employment using a supply and demand graph?

You'd need to draw your pair of axes, labelling the vertical one "wages" and the horizontal one "quantity of workers". Your labour demand and supply curves should look like normal demand and supply curves. The National Minimum Wage (NMW) would be a horizontal line above the equilbrium point. This NMW intersects twice with the pair of axes, the distance between both intersections is your excess labour supply - i.e. the number of unemployed workers in this economy.

MG

Related Economics A Level answers

All answers ▸

Explain how the price mechanism responds to excess supply in a free market


The demand curve can be graphed using the expression Q = 100 - P and the supply curve can be graphed using the expression Q = 40 + 2P. Find the equilibrium price and quantity in this market.


Evaluate policies the government can use to increase the rate of economic growth.


What is a Nash Equilibrium?