Proponents of the minimum wage have asked you to provide a summary of the impact of minimum wages in an alternative model, the model of labor search and bargaining. Specifically, they want you to explain why in this model it is possible for a minimum wage to raise workers' wages without causing any unemployment. Which of the following statements most accurately does so? O The model of labor search and bargaining cannot explain this fact Part of the cost of hiring a worker is the cost of their healthcare and other benefits. A minimum wage causes firms to reduce healthcare payments rather than firing workers. Many workers are offered wages far below the neoclassical equilibrium wage. A minimum wage close to the equilibrium would raise these workers wages without costing any jobs. Firms are unable to coordinate on a wage and would benefit from a single, government-set wage (like the minimum wage) O Workers generally do not want to work, but setting a high minimum wage would entice them into searching for work.

Proponents of the minimum wage have asked you to provide a summary of the impact of minimum wages in an alternative model, the model of labor search and bargaining. Specifically, they want you to explain why in this model it is possible for a minimum wage to raise workers' wages without causing any unemployment. Which of the following statements most accurately does so? O The model of labor search and bargaining cannot explain this fact Part of the cost of hiring a worker is the cost of their healthcare and other benefits. A minimum wage causes firms to reduce healthcare payments rather than firing workers. Many workers are offered wages far below the neoclassical equilibrium wage. A minimum wage close to the equilibrium would raise these workers wages without costing any jobs. Firms are unable to coordinate on a wage and would benefit from a single, government-set wage (like the minimum wage) O Workers generally do not want to work, but setting a high minimum wage would entice them into searching for work.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 4P

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