What 4 outcomes will a binding minimum wage have, and what 1 outcome has 2 possibilities.

Expert Solution

There are 2 major outcomes of binding minimun wage are:

1 The Labour Market due to the minimum wage

labour market, has an equilibrium wage. Equilibirium wage is a point where the demand and supply lines on the minimum wage graph intersect & the rate of pay is equivalent to that of the quantity of hours worked/required. A binding minimum wage in a competitive labour market means that the rate of pay must rises. When the rate of pay has increased, and all employees are being paid a higher wage, the hiring company cannot afford to hire as many employees as it will be too expensive, because not only do they have to pay wages for the skilled jobs, they also have to pay a higher wage than they would have intended for workers to perform the lower skilled jobs.

2 Inefficiency of the Labour market due to the minimum wage?

Labour market is inefficient due to minimum wage because a deadweight loss is present. This occurs because of a decrease in both the workers surplus and the company's surplus.

Rahul Sunny answered 2 years ago

1. What is the effect of a binding minimum wage? 2. There is a supply and...

1. What is the effect of a binding minimum wage? 2. There is a supply and a demand curve, with three prices, above at and below equilibrium. If one of those prices is imposed by the government, what happens/ 3. Got a supply and demand curve, which areas make up economic surplus? 4. What is marginal utility? 5. What is the utility maximization condition? Please answer all 5 questions, with example or a scenario that can relate to these questions...

1. Mkt. for bakery workers. A binding minimum wage is imposed in the market for bakery...

1. Mkt. for bakery workers. A binding minimum wage is imposed in the market for bakery workers. Show the minimum wage Wmin, the number of workers who will have jobs at the new minimum wage Emin, and the Surplus (Su) or shortage (Sh), the total surplus (TS), the deadweight loss (DWL). 2. Mkt. for hand‐made bagels. The change in labor market for bakery workers affects supply/demand of bagels because ____________ _________________________. Show the effect of the change workers’ wages. Equilibrium...

Draw a picture that shows the following: the imposition of a binding minimum wage in a...

Draw a picture that shows the following: the imposition of a binding minimum wage in a monopsony results in an increase in employment. In addition, give a brief intuitive explanation for why you might expect this to occur.

Which of the following is the most likely outcome of a decrease in the minimum wage?...

Which of the following is the most likely outcome of a decrease in the minimum wage? Please also provide an explanation. a) an increase in the number of unskilled workers who are involuntarily unemployed b) an increase in the number of people who are voluntarily unemployed c) a shift to the right of the demand for unskilled workers d) a shift to the left of the supply of skilled workers e) a shift to the left of the supply of...

The minimum wage, if it is binding, lowers the incomes of no workers. only those workers...

The minimum wage, if it is binding, lowers the incomes of no workers. only those workers who become unemployed. only those workers who have jobs. all workers. Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by less than $1. $1. between $1 and $2. $2.

Is the minimum wage a living wage? Under what circumstances would a minimum wage be a...

Is the minimum wage a living wage? Under what circumstances would a minimum wage be a nonbinding price floor? Under what circumstances would a living wage be a binding price floor? Should the government enforce a minimum wage? Should the government implement a living wage?

"Assume that a binding minimum wage does NOT shift the labour demand for unskilled labour. If...

"Assume that a binding minimum wage does NOT shift the labour demand for unskilled labour. If it is fairly easy to replace workers with machinery, then a rise in minimum wage will lead to an increase in the total wage bill (total revenue of all workers), all else equal." Do you agree? For full marks, you need to supply a graph. (a) A graph carries 2.5 marks. The usual deductions for missing and incorrect labels apply. (b) An explanation carries...

(1) What is the impact of a minimum wage above the equilibrium wage on the quantity...

(1) What is the impact of a minimum wage above the equilibrium wage on the quantity of labor supplied and demanded? (Practice drawing a supply and demand graph that shows this. Notice how the impact is affected if the supply curve is flatter or steeper, i.e., more elastic or inelastic. I will post the graph(s) to this discussion thread, after your initial responses are due. You need not submit any graphs in this Discussion Topic post, but you may find...

Explain the characteristics of an "effective" minimum wage. What is the argument for the minimum wage?...

Explain the characteristics of an "effective" minimum wage. What is the argument for the minimum wage? What is the argument against the minimum wage?

consider a competitive labour market.the likely consequence of a binding minimum wage in the labour market...

consider a competitive labour market.the likely consequence of a binding minimum wage in the labour market is

Question