Question

Discuss the impact of the minimum wage when there are two sectors in the economy: the...

Discuss the impact of the minimum wage when there are two sectors in the economy: the covered sector (which is subject to the minimum wage) and the uncovered sector (which is not). Graphically show your answers also.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When there are two sectors in the economy : Sector A and B .

The covered sector ( A) : There will be a decrease in the number of labourers hired . Since implementation of minimum wage above equilibrium or market wage will decrease demand for labour .

The uncovered sector ( B) : There will be lower wage rate in uncovered sector . Since there is no regulation wage will adjust and come down to market equilibrium .

So there will be unemployment generated in covered sector . hence overall unemployment rate will rise .

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is the impact on employment and wages of when covered and uncovered sectors by the...
What is the impact on employment and wages of when covered and uncovered sectors by the minimum wage exist? The hedonic model is also a theory of occupational choice, why?
There are two distinct sectors: taxidermists (X) and tap dancers (T). It is surprising that there...
There are two distinct sectors: taxidermists (X) and tap dancers (T). It is surprising that there is complete labor mobility between the two sectors. There are 200 equally talented workers who supply their labor inelastically. The demand for taxidermists is EX = 190 – 10 wX, and the demand for tap dancers is ET = 160 – 5 wT. a) What is the competitive equilibrium outcome (equilibrium wage and employment level in each sector) in this labor market? b) What...
What are the upside and downside of a higher minimum wage? ****There are many arguments both...
What are the upside and downside of a higher minimum wage? ****There are many arguments both for and against a higher national minimum wage. In many cities around the country, ****the minimum wage has already increased to $15/hr. ***What's your option on this subject? *****Do you believe a $15/hr minimum wage will be a good impact on the economy****?   Have you ever worked at a minimum wage job before? Or are you working at a minimum wage job now? ***...
Assume a specific factors economy produces two​ goods, cloth and​ food, and that when representing the...
Assume a specific factors economy produces two​ goods, cloth and​ food, and that when representing the output of this economy​ graphically, cloth is on the​ x-axis and food is on the​ y-axis. When the price of cloth increases by 7​% and the price of food increases by 7%​, A. the real wage rates are unaffected. B. the output of cloth rises. C. the marginal product of labor in the cloth sector falls. D. labor shifts from the food sector to...
Market impact(s) on the proposed increase in the federal minimum wage to $10 per hour? Which...
Market impact(s) on the proposed increase in the federal minimum wage to $10 per hour? Which part(s) of the labor market will be helped? Which parts of the labor market will hurt? Discuss the effects of the minimum wage on employment.
Does minimum wage cause unemployment? The minimum wage has evoked controversy since its passage as part...
Does minimum wage cause unemployment? The minimum wage has evoked controversy since its passage as part of the Fair Labor Standards Act of 1938. Proponents of the minimum wage argue that a higher minimum wage will help create jobs, grow the economy, help the war on poverty, and will reduce wage inequality. Its critics stress that the minimum wage causes unemployment, hurts the economy, and actually harms the low-income people that were supposed to be helped. These are clearly very...
What are the conditions under which a minimum wage may be good for an economy?
What are the conditions under which a minimum wage may be good for an economy?
What are the conditions under which a minimum wage may be bad for an economy?
What are the conditions under which a minimum wage may be bad for an economy?
Expository essay: The Minimum Wage Instructions: Compose an expository essay where you present information related to...
Expository essay: The Minimum Wage Instructions: Compose an expository essay where you present information related to the minimum wage. In an expository essay you must present the result of your research on the subject to be treated and not your opinion on it. Introduction that includes the definition of the minimum wage and why the Government must go into regulating that activity. A graph of the minimum wage related to the expository essay. In the body of the essay it...
1- Income Inequality, Poverty, and Discrimination affect the economy. Discuss their impact and what should be...
1- Income Inequality, Poverty, and Discrimination affect the economy. Discuss their impact and what should be done by the government - if anything. 2- Also, remember that when discussing the economy - efficiency must be addressed.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT