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Justified wages

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Explain justified wages for workers. Differentiate the minimum wage in the United States with another country, factors that determine this.

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We can determine the marginal revenue of a worker by multiplying the marginal product of the worker by the price of the product the worker produces. This is the amount of extra revenue that the worker generates for the firm. An additional worker will be hired if and only if the value of that worker's marginal product exceeds the wage. Any wage up to the marginal product is economically justified. We expect the marginal product to be somewhat higher than the wage, as in capitalist economies the employer is in business to make a profit. This should not be confused with a just or living wage, which ...

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