Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 3SCQ
Why is a living wage considered a
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Why is a living wage considered a price floor?Does imposing a living wage have the same out come as a minimum wage?
Would consumers have to pay the price for increasing minimum wage?
On page 104 of the third (2019) edition of Naked Economics by Charles Wheelan, Wheelan discusses the possible outcomes of minimum wage. Based on what Wheelan has written and the conversations about minimum wage in the class, which of the below statements is the LEAST likely to be correct if the minimum wage (a price floor) is placed well above the market clearing (equilibrium) wage?
Group of answer choices
The higher the minimum wage is set above the market clearing or equilibrium rate the more likely it is benefit all workers, as everyone's wages will have increased, and employers will not lay off workers because of the higher wages.
The higher minimum wage will benefit those who continue to have a job at the higher wage, but will hurt those who are laid off because employers will hire fewer workers at the higher wage rate.
In an era of global production and a global labor pool in which wages in the U.S. are higher than the wages paid to workers in countries such as Mexico, the…
Chapter 4 Solutions
Principles of Economics 2e
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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Similar questions
- Is the minimum wage an example of a price floor or a price ceiling? What are the supply and demand impacts of a minimum wage?arrow_forwardWhich of the diagrams illustrates the effect of an increase in automobile worker wages on the market for automobiles?arrow_forwardHow does the equilibrium price and quantity change when there are demands to increase wages? Are there any changes or none? Provide a graph of your answerarrow_forward
- What are the pros and cons of increasing the minimum wagearrow_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_forwardUse suitable examples to explain the likely effects of a price ceiling.arrow_forward
- Bill raising federal minimum wage to $15 heads to U.S. House floor The bill to gradually raise the federal minimum wage to $15 from $7.25 by 2024 has cleared a legislative hurdle that sets it up for a vote by the House of Representatives in the coming weeks. What will be the effects of a $15 an hour minimum wage? If the minimum wage rate of $15 is above the equilibrium wage rate, then setting the minimum wage at $15 an hour will O A. minimize the resources used in job search O B. increase employment and eliminate any deadweight loss O C. increase unemployment and create a deadweight loss O D. create an efficient labor market O E. increase the number of low-skilled jobs available With a $15 minimum wage, O A. all workers gain O B. all employers and workers lose OC. only small businesses lose O D. all workers and businesses gain O E. employers lose and workers who can't find jobs lose. Workers who find jobs gainarrow_forwardWhat is the difference between a price floor and a price ceiling?arrow_forwardThe 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.arrow_forward
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