What are the effects of an increase in the minimum wage? Who would be most affected?
What will be an ideal response?
An increase in the minimum wage induces the quantity supplied of labor to increase and the quantity demanded of labor to fall, generating a surplus or an increase in unemployment. Since minimum wage legislation tends to affect lower skilled workers the most, the lowest skilled workers are most likely to be unemployed. These are often minority teenagers.
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Which of the following is true of long-run equilibrium price in a monopolistically competitive market?
A) It is equal to average total cost. B) It is less than average total cost. C) It is higher than average total cost. D) It is lower than marginal cost.
The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and
A) the additional revenue received from selling the output produced as a result of hiring an additional worker. B) the payment made to the worker for producing the additional output. C) the number of workers willing to produce the additional output. D) the elasticity of demand for the output produced by the worker.