Question

In: Economics

Suppose there is a discussion about the minimum wage policy. A group of people argue that...

Suppose there is a discussion about the minimum wage policy. A group of people argue that the wages are currently too low for unskilled labor. They advise government to increase the minimum wage: (5 points)

a. What would this probably mean for the labor market for the college-educated skilled workers? Will that market be affected? Will the equilibrium wage change for the skilled workers? Show using our regular tools of supply and demand. (5 points)

b. What about unskilled labor? How are they going to be affected if a new minimum wage law is implemented? What would happen in the labor market for unskilled workers? Again, show using our regular tools of supply and demand. (15 points)

c. Opponents of the proposed minimum wage policy argue that demand for unskilled labor is not as inelastic as proponents of the policy believe. Now, suppose you do not know whether the demand curve is relatively elastic or inelastic. Using two different demand curves on a single graph (one relatively inelastic and the other relatively elastic), show the effects of a minimum wage policy in both cases. Which case had more detrimental effects on efficiency and employment? Compare results on the graph. If the opponents’ belief about demand is correct, should the government re-consider the proposed minimum wage policy?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Suppose there is a discussion about the minimum wage policy. A group of people argue that...
Suppose there is a discussion about the minimum wage policy. A group of people argue that the wages are currently too low for unskilled labor. They advise government to increase the minimum wage: a. What would this probably mean for the labor market for the college-educated skilled workers? Will that market be affected? Will the equilibrium wage change for the skilled workers? b. What about unskilled labor? How are they going to be affected if a new minimum wage law...
Suppose that Malaysian government is considering to raise the minimum wage. Some people suggested that a...
Suppose that Malaysian government is considering to raise the minimum wage. Some people suggested that a government subsidy could help employers finance the higher wage. This exercise examines the economics of a minimum wage and wage subsidies. Suppose the supply of low-skilled labor is given by L S = 10w, where L S is the quantity of low-skilled labor (in millions of persons employed each year), and w is the wage rate (in Malaysian Ringgit per hour). The demand for...
Many people feel the federal minimum wage of $7.25 is too low, and a minimum wage...
Many people feel the federal minimum wage of $7.25 is too low, and a minimum wage closer to $9 is more appropriate. List three arguments for raising the federal minimum wage OR three arguments against raising the federal minimum wage. I would like two arguments to be from the notes, and one to be your own argument. Please make the case, rather than just provide bullet points.
For this Discussion, you will research the minimum wage laws. Your response must include a discussion of both the advantages and disadvantages of minimum wage laws.
For this Discussion, you will research the minimum wage laws. Your response must include a discussion of both the advantages and disadvantages of minimum wage laws.For example, you might consider these differing perspectives as you approach your research:Perspective One: The U.S. Department of Labor has imposed a minimum wage since 1938. Most states mandate minimum hourly wage rates, too. Minimum wage legislation inhibits an employer from setting wage rates below the directed amount. Although the goal is to help workers,...
Understanding Minimum Wage Policy Minimum wage is one of the most classic price floor policies that...
Understanding Minimum Wage Policy Minimum wage is one of the most classic price floor policies that governments use in practice. Suppose the following demand and supply curves describe the labor market for bus drivers in Endor. Demand: P = 20 – 0.75Q Supply:   P = 2 + 0.25Q where P is the wage per hour, and Q represents the number of bus drivers hired, in thousands (e.g. Q = 1 means that 1,000 drivers have been hired). a) Calculate the...
Pick a side and argue for or against raising the minimum wage. Use your knowledge of...
Pick a side and argue for or against raising the minimum wage. Use your knowledge of price floors and find an article to back up your point of view. If the minimum wage from 1961 had been adjusted for inflation, it would be $22 per hour today. The Massachusetts minimum wage will rise to $15 an hour over five years, and a new paid family and medical leave program will be introduced, under a bill Gov. Charlie Baker signed into...
Some economists and politicians argue that raising the minimum wage does a disservice to those it...
Some economists and politicians argue that raising the minimum wage does a disservice to those it tries to help. They claim that businesses will resist a higher minimum wage by laying off workers, moving their businesses offshore, or just closing down. Some sympathetic to the plight of the poor claim that society should deal with poverty in a different way, such as through private charities. Most opponents of a minimum wage claim that workers are free to seek better paying...
Discussion of the legislation that established the federal minimum wage, the year that it was established,...
Discussion of the legislation that established the federal minimum wage, the year that it was established, and the major reasons for establishing the legislation.
15. Suppose the wage of unskilled workers is equal to the minimum wage. If a tax...
15. Suppose the wage of unskilled workers is equal to the minimum wage. If a tax on labor is levied on _____, the presence of the minimum wage _____. a. workers; does not affect the tax burden of workers b. workers; reduces the tax burden of workers c. firms; reduces the tax burden of firms d. firms; does not affect the tax burden of firms
What would a law and economics approach say about a minimum wage policy? What alternatives might...
What would a law and economics approach say about a minimum wage policy? What alternatives might it suggest? Please explain in detail.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT