Answer
a) Please see the graph.
b) The number of workers employed would decrease, and the wage level would fall.
c) More workers might be looking for a second job to replace the lost cash wages (from the introduction of fringe benefits).
d) Fewer workers are employed.
Work Step by Step
a) The graph shows the initial equilibrium ($P_{0}$ and $Q_{0}$) price and quantity, respectively. The law decreases the marginal profit the firm earns from each worker. Thus, the demand curve shifts to the left and decreases the number of workers demanded at the equilibrium.
c) The labor supply curve could shift since fewer workers are receiving less cash (due to the fringe benefits). To have the same amount of cash, those workers might look for a second job.
d) Fewer workers are employed with the introduction of fringe benefits. Usually, unskilled and inexperience workers have wages in place due to minimum wage laws. These workers would be adversely affected since the firms would have to pay for the fringe benefits and hire fewer workers.
