Question

In this 1-2 page paper, analyze what happens when a higher minimum wage is enacted (raising a price floor on the price of labor). Will the number of workers hired change? Why? What might be an unintended consequence of a higher minimum wage law designed to help low income workers?

Next, analyze what happens when the price of rent is regulated so that prices are kept artificially low (a price ceiling). What will happen to the availability of apartments? Why? What might be an unintended consequence of a rent control wage law designed to help low income renters?

Answer 1

Now whenever the price floor in enacted for a labour force that means that they will be given the wages higher than the one in equilibrium , the intention of this is to help labour to improve their standards of living and earn more for their work, but the unintentional consequence of this thing is that it reduces the demand for labpur creating unemployment within the economy.

in case of rent controls price ceilings are set below the equilibrium level in order to help the low income renters to rent houses within the country, but this doesnt solve the problem as price ceilings reduce the supply of the rednted houses in the country, the landlords doesnt feel like renting at low prices so most of the landlords back off from thr market leaving few options for thr renters to look for.