Is an effective minimum wage fair? A. The result of the minimum wage is unfair because only those people who have jobs and keep them benefit from the minimum wage. B. The result of the minimum wage is fair because those who find jobs are the least well off. C. The minimum wage imposes a fair rule because it is legislated by the government and passed into law by majority rule. D. The minimum wage is a fair rule because otherwise low-skill workers would earn a lower wage.
Added by Jonathan D.
Close
Step 1
This is a normative question about economic policy, and the fairness can be viewed from different perspectives. Show more…
Show all steps
Your feedback will help us improve your experience
James Kiss and 71 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
The minimum wage is an ineffective antipoverty measure for all EXCEPT which of the following reasons? The wage ceiling created by minimum wage laws falls below the equilibrium price, producing a shortage of labor. An increase in wages may cause employees to lose working hours, resulting in a negative net change in pay. The wage floor created by minimum wage laws lies above the equilibrium price, producing a surplus of labor. Increased wages can force small businesses, which are less able to adapt to changes in costs, to close their operations, reducing the total quantity of jobs. The wage mandated by law often exceeds the value created by low-skilled workers, resulting in a move away from labor-intensive processes.
James K.
Suppose a state passes a minimum wage law that increases the minimum wage from $5/hour to $20/hour. The equilibrium wage prior to the minimum wage hike was $10/hour. Which of the following is likely to result from the minimum wage? a. The state will experience full employment. b. Employers will demand more labor than workers will supply. c. The labor market will become more efficient. d. Some employers and workers will agree on a wage less than $20 and not report the wages to the government.
Andrew D.
Demand and supply conditions in the market for unskilled labor are important concerns for business and government decision-makers. Consider the case of a federally mandated minimum wage set above the equilibrium, or market-clearing, wage level. Some of the following factors have the potential to influence the demand or quantity demanded of unskilled labor. Influences on the supply or quantity supplied may also result. Holding all else equal, describe these influences as increasing or decreasing and indicate the direction of the resulting movement along or shift in the relevant curve(s). A. An increase in the quality of secondary education. B. A rise in welfare benefits. C. An increase in the popularity of self-service gas stations, car washes, and so on. D. A fall in interest rates. E. An increase in the minimum wage.
Rashmi S.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD