Most economists are in agreement that minimum wages cause unemployment and make some people worse off as a result. However, does that imply that it makes everyone worse off? Who might benefit?
What will be an ideal response?
Clearly people who are still fortunate enough to hold on to their jobs will experience a rise in their income. Also, minimum wage laws typically cover work done by workers who have lower levels of skill because of youth, inexperience and lack of education and training. The higher wages that they earn makes other workers labor demand rise if it is considered as a substitute for low skilled minimum-wage-protected workers.
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If a person were in the 20% tax bracket and given the choice of a $500 credit or a $2500 deduction,
A. he would not care. They would constitute the same tax benefit. B. he would take the credit every time. C. he would not qualify for either. D. he would take the deduction every time.
Government debt increases the interest rate and private investment
Indicate whether the statement is true or false
Mutual interdependence among firms in an oligopoly means that:
a. firms never practice price leadership. b. firms never form a cartel. c. it is difficult to know how firms will react to decisions of rivals. d. no formal agreement is possible among firms.
You receive an e-mail from a firm proposing the following business deal. They will send you $1,000 now, and in exchange you will send them $1,100 in one year. You will just break even from this deal if the interest rate is:
a. 12%. b. 4%. c. 6%. d. 10%.