From an economic standpoint, evaluate the effect of a minimum wage on the market for low-wage labor. Include the following: Discuss what economic theory predicts will happen Discuss what elasticity conditions would economic theory prove to be true or false.

From an economic standpoint, evaluate the effect of a minimum wage on the market for low-wage labor. Include the following:

Discuss what economic theory predicts will happen

Discuss what elasticity conditions would economic theory prove to be true or false.

 

 

Answer:

Discuss what economic theory predicts will happen

The prediction from ordinary economic theory is unambiguous, that means, an ascend in minimum wage allowed leads flawlessly competitive employers to reduce the work. Neoclassical monetary speculations display an unmistakable expectation which says when the cost of work expands, managers will request less work. Be that as it may, several numerous current reviews testing this forecast have found little for no impacts of minimum wage arranged level of the jobs. One conceivable clarification for these discoveries reflects that interest for the labor of low-wage is genuinely inelastic; or alternatively is which more muddled flow cloud identification of impact of minimum wage on the employment.

— Draw a supply and demand graph illustrating the effect of a minimum wage

Figure enclosed. The equilibrium, at the point A that a measure of specialists willing for working relates to the sum that companies wish to enlist

Demand curve is the measure of laborers that every one of the organizations in an economy that demand. The higher, value the company should pay for specialist, the fewer laborers that wish to procure. In the same way, the request bend inclines down per common.

Supply curve is the measure of specialists those will provide their work in return for wage on the offer. The higher, wages, more individuals inside an economy will work.I

— Discuss what elasticity conditions would economic theory prove to be true or false

An assumption in the minimum-wage system is that the workers of low-wage as gathering advantage from an growth in the aggregate wage. By this way the laborers be ideal off when minimum rate of wage, set at level where, total demand for the labor of low-wage, is unitary elastic, also would improved off in minimum wage rate, duration of the total interest for work, inelastic

Asked on February 13, 2018 in economics.
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