EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 6, Problem 6SP
To determine
Explain will the community lose more jobs if minimum wage increases.
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The minimum wage originally was only 25 cents an hour. Today it is $7.25 an hour. Assume that Congress is considering raising the minimum wage again and your U.S. representative is asking for public opinion on this issue. Write a letter to your representative with arguments for and against a higher minimum wage.
Suppose you were preparing a memo for the White House on the effects of a large increase in the
minimum wage. What would you write about the effects on employment, unemployment, job
training, and working conditions? Who benefits and who loses from a higher minimum wage?
Would consumers have to pay the price for increasing minimum wage?
Chapter 6 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Twenty-nine states and the District of Columbia have a state minimum wage higher than the federal minimum wage of $7.25. A number of states and cities have increased their minimum wage to as high as $15 per hour. Suppose that North Carolina lawmakers are considering raising the North Carolina minimum wage to $15. Would that higher minimum wage be A Good Thing or A Bad Thing for you? If you could vote on this proposal, would you vote to raise the minimum wage or would you vote to keep it where it is? Justify your answer. Be sure to incorporate positive economic analysis (that is, the economic effects of the higher minimum wage) as well as normative economics (your opinion about whether this would be Good or Bad).arrow_forwardGive reasons why there should be no minimum wage lawsarrow_forwardShould the government raise the minimum wage? Why or why not? Take a stand and explain.arrow_forward
- should the federal government raise the minimum wage? Explainarrow_forwardA case study in this chapter discusses the federal minimum-wage law. Suppose the minimum wage is $7 per hour in the market for unskilled labor, as shown on the following graph. Use the grey point (star symbol) to indicate the market equilibrium wage and quantity of labor in the absence of a minimum wage. Then use the purple point (diamond symbol) to indicate the level of employment at the minimum wage provided, and use the orange point (square symbol) to indicate the quantity of labor supplied at this minimum wage. Finally, use the green polygon (triangle symbols) to show the total wage payments to unskilled workers. Market EquilibriumMinimum Wage OutcomeLabor Supplied at Minimum WageTotal Wage Payments012345678910109876543210Wage (Dollars per hour)Quantity of Labor （Millions of workers)DemandSupplyMinimum Wage At the minimum wage of $7 per hour, the level of unemployment is million workers, and the total wage payments to workers are million. Now suppose the…arrow_forwardEconomic theory suggests that an increase in the minimum wage will prompt firms to hire fewer low skill workers. true or falsearrow_forward
- Are minimum wage laws efficient? Why or why not?arrow_forwardWhat is a minimum wage? Explain why it may fail to help the poor households in an economy.arrow_forwardDraw a supply-demand diagram representing the impact of a minimum wage in the labor market. What does economic theory predict about the change in employment with the introduction of or increase in a minimum wage? How does the prediction above vary with elasticity of labor supply and labor demand?arrow_forward
- True or false: minimum wage always increases the welfare of workers. Explain your answer with a graph.arrow_forwardThe City imposes a minimum wage of $6 an hour for fast food workers when the market rate is $8. What effect does the minimum wage have on what fast food workers earn? No effect wages fall to $6 There is now a surplus of workers There is now a shortage of workersarrow_forwardWhat impact does the minimum wage have on the economy?arrow_forward
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