What effect would this increase in the minimum wage

Reference no: EM133257263

Assignment - Equilibrium Price & Quantity Questions

Case Study - Please read the case "The Minimum Wage" from Chapter 6 "Supply, Demand, and Government Policies" Page: - 117 given in your textbook - "Principles of Macroeconomics". A case study discusses the federal minimum-wage law.

Question 1 -

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?

Important Note: - Support your submission with course material concepts, principles, and theories from the textbook.

Question 2 -

a. Should a nation tend to export or import goods for which it has a comparative advantage? Explain. Why do economists oppose policies that restrict trade among nations?

b. Maria can read 80 pages of economics in an hour. She can also read 40 pages of sociology inanhour. She spends 6 hours per day studying.

1. Draw Maria's production possibilities frontier for reading economics and sociology.

2. What is Maria's opportunity cost of reading 120 pages of sociology?

Reference no: EM133257263

Questions Cloud

How you changed the search to use more keyword skills : What you searched for and how you changed the search to use more keyword skills. What do you think of the change? Did it improve your results or not?

Bottom of pyramid sensitivities by participating firms : Is the fierce competition in the beverage sector representative of Bottom of the Pyramid (BOP) sensitivities by the participating firms?

What are common misconceptions of marketing : MKT/574 Marketing: Social, Mobile, and Analytics Assignment - Concepts and Applications Worksheet, University of Phoenix - What are common misconceptions

How scalable-flexible-transferable policy is on global scale : I am very interested in global health and would like to know how scalable, flexible, and transferable a policy is on a global scale.

What effect would this increase in the minimum wage : What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand

Definitions and models of sustainability : Were you surprised by this history or by any of the definitions and models of sustainability? In what way was it surprising or not?

Level of social consciousness in its supply chain : What opportunities are available to the Ferrero Group to help it to establish a highly differentiated level of social consciousness in its supply chain?

Implement technological tools in production models : Implement technological tools in production models like forecasting, lean manufacturing, and world-class manufacturing (WCM) to enhance productivity

Facebook algorithms in success of local online businesses : Facebook Algorithms in the Success of Local Online Businesses in India. What method will you choose to analyze the stationary data that you plan to collect?

User Account

All Pages