Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 4, Problem 6CQ
(a)
To determine
Impact of an increase in minimum wage on the employment.
(b)
To determine
Impact of an increase in minimum wage on the
(c)
To determine
Impact of an increase in minimum wage on the availability of low-skilled workers.
(d)
To determine
Impact of an increase in minimum wage on the demand for high-skilled workers.
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Analyze the impact of an increase in the minimum wage from the current level to $15 per hour. How would the following be affected?
a. employment of people previously earning less than $15 per hour
b. the unemployment rate of teenagers
c. the availability of on-the-job training for low-skilled workers
d. the demand for high-skilled workers who are good substitutes for low-skilled workers
Draw a supply-demand diagram representing the impact of a minimum wage in the labor market.
What does economic theory predict about the change in employment with the introduction of or increase in a minimum wage?
How does the prediction above vary with elasticity of labor supply and labor demand?
Which of the following is the most likely result of an increase in the minimum wage? a.a decrease in the employment of unskilled workers b.an increase in the demand for unskilled workers c.a decrease in the number of workers seeking minimum wage jobs d.an increase in the employment of unskilled workers
Chapter 4 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- ;Q35 Explain, who is helped and who is hurt by a minimum wage? Justify your reasoning.arrow_forwardThe market of labor force of food delivery is characterized by the chart below. The government decides to protect the citizens and establish the minimum wage on the level of UAH 5200 Wage 3800 4000 4300 4700 5000 5200 5500 5800 6000 Labor supply 10000 11000 12500 14000 14600 15000 15900 16400 17000 Labor demand 17000 16000 15000 14000 13000 12000 11000 10000 9000 How the minimum wage would influence the market of labor force (on business and on workers)? What are the pros and cons of minimum wage implementing? How the workers could mitigate these changes?arrow_forwardEvaluate this statement: "All minimum wage workers would be better off if the minimum wage rose to $10.50 per hour."arrow_forward
- Give typing answer with explanation and conclusion what does the effectiveness of minimum wage depend on?arrow_forwardA case study dicusses the federal minimum wage law.a. Suppose the minimum wage is above the equilibrium wage in the market for unskilled labor. using the supply and demand diagram of the market for unskilled labor, show the market wage,the number of workers who are employed, and the number of workers who are unemployed. Also show total payment to unskilled workers.b. Now suppose the secretary of labor proposes an increase in the minimum wage.What effect would this increase have on employment? does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?c. What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities or neither?d.if the demand for unskilled labor were inelastic, would the proposed increase in the minimum wage raise or lower total wage payments to the unskilled workers. would you answer…arrow_forwardThe minimum wage originally was only 25 cents an hour. Today it is $7.25 an hour. Assume that Congress is considering raising the minimum wage again and your U.S. representative is asking for public opinion on this issue. Write a letter to your representative with arguments for and against a higher minimum wage.arrow_forward
- a) Based on economic surplus, explain who gains and who loses in the case of the minimum wage and whether the overall impact for society is positive or negative.arrow_forwardWhat Republicans party think about Minimum wage?arrow_forwardWhat are the possible effects of minimum wage increase to the economy?arrow_forward
- Who does federal minimum wage help and who does it harm? Does raising the current level of the minimum wage increase unemployment, drive business away, or harm the very poor? Will a higher minimum wage raise the standard of living and buying power of the wage earners?arrow_forwardSupport a higher minimum wage. Analyze the challenges that this will be for households, firms, and the government depending on the side that is chosenarrow_forwardList and explain all possible impacts of minimum wagearrow_forward
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