A conservative critic of government programs has written Governments know A conservative critic of government programs has written, “Governments know how to do one thing well. They know how to create shortages and surpluses.” Explain this quotation using examples like the minimum wage or interest-rate ceilings. Show graphically that if the demand for unskilled workers is price-elastic, a minimum wage will decrease the total earnings (wage times quantity demanded of labor) of unskilled workers.

A conservative critic of government programs has written Governments know A conservative critic of government programs has written, “Governments know how to do one thing well. They know how to create shortages and surpluses.” Explain this quotation using examples like the minimum wage or interest-rate ceilings. Show graphically that if the demand for unskilled workers is price-elastic, a minimum wage will decrease the total earnings (wage times quantity demanded of labor) of unskilled workers.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter4: Prices: Free, Controlled, And Relative

Section: Chapter Questions

Problem 5QP

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