A case study in this chapter discusses the federalminimum-wage law.a. Suppose the
Chapter 6, Problem 8(choose chapter or problem)
A case study in this chapter discusses the federalminimum-wage law.a. Suppose the minimum wage is abovethe equilibrium wage in the marketfor unskilled labor. Using a supplyand-demanddiagram of the market forunskilled 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 paymentsto unskilled workers.b. Now suppose the secretary of labor proposesan increase in the minimum wage. Whateffect would this increase have on employment?Does the change in employmentdepend on the elasticity of demand, the elasticityof supply, both elasticities, or neither?c. What effect would this increase in the minimumwage have on unemployment? Doesthe change in unemployment depend on theelasticity of demand, the elasticity of supply,both elasticities, or neither?d. If the demand for unskilled labor wereinelastic, would the proposed increase in theminimum wage raise or lower total wagepayments to unskilled workers? Would youranswer change if the demand for unskilledlabor were elastic?
Unfortunately, we don't have that question answered yet. But you can get it answered in just 5 hours by Logging in or Becoming a subscriber.
Becoming a subscriber
Or look for another answer