The governor is concerned about poverty in the state and decided to raise the minimum wage from $7.25/hour to $15/hour. She claims that this would be an effective way to assist low income families, although she is also concerned that the potential loss of jobs due to the new policy will lead to increased unemployment. Assume the market for workers in this state is perfectly competitive and draw a graph showing supply and demand for workers. Demonstrate the effect of the policy on the graph and briefly evaluate the governor's claims.

The governor is concerned about poverty in the state and decided to raise the minimum wage from $7.25/hour to $15/hour. She claims that this would be an effective way to assist low income families, although she is also concerned that the potential loss of jobs due to the new policy will lead to increased unemployment. Assume the market for workers in this state is perfectly competitive and draw a graph showing supply and demand for workers. Demonstrate the effect of the policy on the graph and briefly evaluate the governor's claims.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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