Discusses the federal minimum-wage law

Reference no: EM133243211

Assignment:

Please read the case "The Minimum Wage" from Chapter "Supply, Demand, and Government Policies" Page: - 117 given in your textbook - "Principles of Macroeconomics". A case study discusses the federal minimum-wage law.

a. Suppose the minimum wage is above the equilibrium wage in the market for unskilled labor. Using a 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 the total wage payments 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 unskilled workers? Would your answer change if the demand for unskilled labor were elastic?

Reference no: EM133243211

Questions Cloud

Alberta law-which of these actions are legally permitted : Big Blue Inn is a boutique hotel privately owned by the Murray McMoney, a local land developer. Which of these actions are legally permitted?

Can you think of fiscal policy to stabilize the economy : Implement changes in policy (i.e., tax codes, the welfare system), can you think of any problems with using fiscal policy to stabilize the economy?

How will president trump imposition of tariffs on aluminum : How will President Trump's imposition of tariffs on aluminum imports into the United States affect you as a consumer? Why?

Explain supply and demand factors that are influencing rate : Find an estimate of the current unemployment rate in Colorado (cite it). Using this figure, explain the supply and demand factors that are influencing the rate.

Discusses the federal minimum-wage law : Now suppose the secretary of labor proposes an increase in the minimum wage. What effect would this increase have on employment?

Discuss different market economic systems : Locate a recent article (published within the last year) that discusses capitalism and economic market systems in the United States.

Difference between poverty incidence-subsistence incident : Difference between poverty incidence and subsistence incident. Inequality as a necessary consequence of economic growth.

Determine a positive capital depreciation rate : Consider a positive capital depreciation rate 6 > 0. Derive the long-run capital supply curve.

What is the role of corporate governance : What is the principal-agent problem? What is the role of corporate governance? How is corporate culture different than governance?

User Account

All Pages