--%>
Assignment Help - homework help

Assertion to increase in the minimum wage

Use the circular flow model to confirm this assertion for a $1 per hour increase in the minimum wage?

E

Expert

Verified

This will increase costs of some businesses immediately and most businesses eventually, as better paid labor demands and gets what it considers its rightful historic percentage premium over the minimum wage.  This will shift businesses’ supply curve to the left, leading to a decreased demand for resources though total business costs paid to labour will likely have increased.  With increased income, labor households will most likely increase consumption by more than the decrease of capitalist households (those getting at least part of their income as rents, interest, and profits).  Thus flow of goods and services to household’s increases as does flow, receipts of businesses from households.

The distribution of income will be toward labor.  There will be increased wages—especially for the lowest paid workers.  There will also be a small reallocation of resources towards labour.  Unemployment may rise for the lowest paid workers and so will prices.

   Related Questions in Business Economics

  • Q : Effects of that depreciation or

    Would a decline in U.S. consumer income or a weakening of U.S. preferences for foreign products cause the dollar to depreciate or appreciate?  Other things equal, what would be the effects of that depreciation or appreciation on U.S. exports and imports?

    		•
  • Q : Illustrate Economics for citizenship

    Illustrate Economics for citizenship?

    		•
  • Q : Illustrate the advantage and

    Illustrate the advantage and disadvantage of Corporations?

    		•
  • Q : Illustrate other than price many factors

    Illustrate other than price many factors determine the outcome?

    		•
  • Q : Guardian implies that there really is

    Evaluate and explain the statements: “Market is its own guardian implies that there really is an invisible hand or taskmaster that watches over the decision makers in the marketplace”

    		•
  • Q : Historical process by Adam Smith of

    Writings on the historical process by Adam Smith of economic development do not comprise heavy reliance upon: (1) the development of property rights. (2) self interest. (3) divisions of labor in production processes. (4) innovations d

    		•
  • Q : How will the goods and services be

    How will the goods and services be produced?

    		•
  • Q : Need urgent help need urgent help in

    need urgent help in business economics, please suggest

    		•
  • Q : Banking crisis on checkable deposits

    Question: Some developing countries have suffered banking crises in which depositors lost part or all of their deposits (in some countries there is no deposit insurance). This type of crisis decreases depositors' confidence in the banking syst

    		•
  • Q : When are transaction costs to ultimate

    Transaction costs to ultimate consumers are reduced if: (w) consumers travel long distances to buy directly from manufacturers quite than buying the goods at local retail stores. (x) intermediaries generate income while conveying goods from manufactur

    		•