Assume that the (equilibrium) wage in the labor market for low skilled workers is is $10/hour. The government’s goal is to help low paid families. Is a minimum wage of $15/hour likely to better achieve the government’s goal if the demand for labor is elastic or if it is inelastic? Provide diagram(s) to support your answer.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter20: Unemployment
Section20.5: The Theory Of Efficiency Wages
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Assume that the (equilibrium) wage in the labor market for low skilled
workers is is $10/hour. The government’s goal is to help low paid families. Is a minimum wage of
$15/hour likely to better achieve the government’s goal if the demand for labor is elastic or if it is
inelastic? Provide diagram(s) to support your answer.

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