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Business cycles, supply and demand, price of labor, minimum wage law

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1. In economic terms, what are the market consequences of a price floor? Discuss the economic implications of implementing a legal minimum wage.

2. What do the laws of supply and demand predict would be the result of an immediate removal of minimum wage in terms of the price of labor and the quantity available?

3. Do you believe that the minimum wage should be raised in order to provide workers with a better standard of living? Why or Why not?

4. Is the minimum wage law an effective poverty-fighting measure? Discuss at least one alternative policy.

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The solution does a great job of explaining the concepts being asked in the question. The solution is very well explained and detailed. A good response for anyone looking to get a deeper understanding of the economics concepts. Overall, an excellent response.

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1. If the price floor is imposed above the market equilibrium price and quantity, then it restricts the amount of quantity. If the floor is imposed below the equilibrium point, then it has no impact on market economics. The economic implications of implementing a legal minimum wage can be severe. The government imposes a legal minimum wage in order to preserve the standard of living and to ...

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