Several types of public policy have been used to attempt to alleviate poverty, with varying success. One example is minimum wage laws. An important drawback of this type of policy is that it can result in unemployment among the workers who are affected by the minimum wage. The magnitude of the change in unemployment associated with a minimum wage depends on the elasticity of demand for labour. The more the demand for this type of labour, the lower the unemployment caused by the minimum wage.

Several types of public policy have been used to attempt to alleviate poverty, with varying success. One example is minimum wage laws. An important drawback of this type of policy is that it can result in unemployment among the workers who are affected by the minimum wage. The magnitude of the change in unemployment associated with a minimum wage depends on the elasticity of demand for labour. The more the demand for this type of labour, the lower the unemployment caused by the minimum wage.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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