7 The Thai government actively intervenes in markets (Nophakhun Limsamarnphun, “Govt Imposes Price Controls in Response to Complaints,” The Nation, May 12, 2012). a. The government increased the daily minimum wage by 40% to Bt300 (300 bahts ≈ $9.63). Show the effect of a higher minimum wage on the number of workers demanded, the supply of workers, and unemployment if the law is applied to the entire labor market. b. Show how the increase in the minimum wage and higher rental fees at major shopping malls and retail outlets affected the supply curve of ready-to-eat meals. Explain why the equilibrium price of a meal rose to Bt40 from Bt30. c. In response to complaints from citizens about higher prices of meals, the government imposed price controls on ten popular meals. Show the effect of these price controls in the market for meals. d. What is the likely effect of the price controls on meals on the labor market?
7 The Thai government actively intervenes in markets (Nophakhun Limsamarnphun, “Govt Imposes
Nation, May 12, 2012).
a. The government increased the daily minimum
wage by 40% to Bt300 (300 bahts ≈ $9.63).
Show the effect of a higher minimum wage on
the number of workers
of workers, and
applied to the entire labor market.
b. Show how the increase in the minimum wage
and higher rental fees at major shopping malls
and retail outlets affected the supply curve of
ready-to-eat meals. Explain why the
price
c. In response to complaints from citizens about
higher prices of meals, the government imposed
price controls on ten popular meals. Show the
effect of these price controls in the market for
meals.
d. What is the likely effect of the price controls on
meals on the labor market?
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