Assignment

Disregard the new tax from number three. Now assume the government imposes a price ceiling of $100 in this market, as the result of protest of price gouging by sellers. What would happen to the price and quantity in this market?

e. Workers: the workers were given less money when the prices of the goods decreased.

B. Another problem with the minimum wage is that it is not high enough to allow people to afford every day essentials.

It can also be argued that raising the minimum wage would inadvertently have a negative effect on the economy and actually increase poverty. If the minimum wage were to increase from $7.25 to $10.10, the result would be the loss of 500,000 jobs, as predicted by the Congressional Budget Office (Should the Federal). 54% of employers stated that they would lower hiring levels and 38% stated that they

If this is indeed the case, the raising of the minimum wage does not positively affect the poor, but reduces the ability of the poor to purchase the necessary items needed to survive. If the employer must increase the wage of its entry-level workers, there is virtually no chance they will be increasing the wage of the workers just above the minimum wage level. Therefore, the increase in the minimum wage will reduce the buying power of the poor family by increasing the cost of goods required to

Workers can respond by voluntarily working harder. – Legislated increases in the minimum wage improves workers morale thereby increasing their productivity. The increase in productivity helps balance off the increase in labor cost. An increased wage rate causes an income and substitute effect. Income effect causes the worker to work fewer hours now that their income increased. Substitution effect causes the worker to work more hours.

An increase in the minimum wage would push companies to take this route as it becomes more and more profitable to them. The end result of all of this would be a suddenly increased level of unemployment bound to become subsequent with an increase in government-funded welfare expenses, weakening the economy even more.

To begin, increasing minimum wage would increase economic activity. With an increase of $1.75 hourly, it has been predicted that there would be increase of aggregate household spending to $48 billion the next year (Aaronson). This increase would boost the United States GDP and lead to job growth, which proves that higher minimum wage equates to higher economic activity. In addition, it has also been found that raising minimum wage would would benefit

B. And you wouldn’t be alone in answering yes to the second question. You’d likely be with the millions of unemployed people, people below the poverty line, and people who earn the measly $7.25 federal minimum wage that would like to earn more money. There are many in the latter group who are trying to support families solely off of a minimum wage job.

One concern that is commonly mentioned during the debate on raising minimum wage is the loss of employment as a result of the legislation. A common fear is that small business owners will not be able to pay their employees and may need to lay off workers In order to keep the business running.

A. Subpoint: One of the main effects of increasing the minimum wage is that it would result in job loss.

With the minimum wage set at $7.25 dollars per hour many people are struggling to make do. The average cost of living in America is too much for people, who make minimum wage, to make ends meet. It’s thought that raising the minimum wage will have a negative effect on the unemployment rate but there has been no evidence of that. The value of the minimum wage has dropped immensely since 1960. Raising the minimum wage will be beneficial to America and its citizens. In 1968 the minimum wage was equal to $10.74 today. That means in 50 years the purchasing power of the minimum wage has diminished. From the end of WWII upto 1968 minimum wage was on pace with the average worker productivity rate. If this trend was true from 1968 to today and worker

4. Using the following information for individuals and their willingness to pay for a bottle of ginger ale, calculate the total consumer surplus at a market price of $5.

b. Suppose the price for the ice cream is currently $5. Will this price result in a shortage or a surplus? How much is the shortage or surplus? What would you expect to happen to price?

Now onto the topic of the effects of the wage policy on elasticity within a market. I read a very interesting article that was written by a man named Jonathan Malesick. He argued that if minimum wage was increased the level of unemployment would decrease. I had never thought