Texaco employs workers on its oil rigs. The supply and demand for labor is D= 100 -2p and S=10+p.

In equilibrium, the wage of labor, P* = 30, the quantity Q*=40.

Suppose now that the government sets a minimum wage of $40 for oil rig workers due to the dangers of the job.

In the new equilibrium, the wage of labor is $40.

In the new equilibrium, the quantity of labor that is employed is 20 and the excess supply of labor is 30.

Consider a positive shock to labor demand. Texaco has discovered a new technology that increases their value from each worker, so they are willing to pay $x more per worker. Find the minimum x such that the minimum wage is not binding.

Under the new technology where $x is the minimum you found earlier, how many more workers are hired than in the minimum wage scenario with old technology?

The government noticed that when taxes on workers went up, wages also went up. Suppose that instead of a $40 minimum wage, the government taxes each worker by $z (with z>0) to raise worker wages.

Express the equilibrium take-home (post-tax) wage for workers as a function of z: a+bz Calculate a and b.