Short Answer: Describe carefully the consequences of an increase in the minimum wage above equilibrium on...
Short Answer: Describe carefully the consequences of an increase in the minimum wage above equilibrium on employment, unemployment and earnings.
Homework Answers
If
a minimum wage is imposed above the equilibrium wage then
unemployment rate is determined by ∆U.Labour demanded at this wage
rate is Qd and labour supplied is Q's which makes up to the
unemployment rate of ∆U.
Thus,a minimum wage above the equilibrium wage rate increase unemployment rate and decreases employment rate.
Earning would rise due to this policy but the quantity of labour benefiting from this increased earnings would rise.
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Short Answer: Describe carefully the consequences of an increase
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