--%>
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 : What do you mean by spillover What do

    What do you mean by spillover. Write short note on it?

    		•
  • Q : Summary of what can cause a decrease in

    Illustrate a summary of what can cause a decrease in demand?

    		•
  • Q : Free rider problem Question: Explain

    Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good. Answer:

    		•
  • Q : Question 7 Question 7: You are given

    Question 7: You are given the following data about two firms: FIRM A Quantity 0 1 2 3 4 5 6 Total revenue ($) 0 10 20 30 40 50 60 Average revenue ($) ___ ___ ___ ___ ___ ___ ___ Marginal revenue ($) ___ ___ ___ ___ ___ ___ Total cost ($) 30 42 50 60 76 100 14

    		•
  • Q : Technical change and vintage technology

    In heterodox economics, what implications does technical change and vintage technology contain for the cost structure of the business enterprise?

    		•
  • Q : Explain about the principle of

    Economic efficiency needs that, relative to the other goods which different individuals might consume, the people who value exact goods relatively the most should own and/or use all goods. Such principle is termed as: (i) economic equity. (ii) allocat

    		•
  • Q : What is the basic principle of

    What is the basic principle of comparative advantage?

    		•
  • Q : Summary of what can cause an increase

    Illustrate a summary of what can cause an increase in demand?

    		•
  • Q : Divide of the study of economics MOST

    The study of economics is MOST frequently divided within: (1) positive economics and negative economics. (2) macroeconomics and microeconomics. (3) subjective economics and objective economics. (4) supply side and demand side economics. (5) conservative economics and

    		•
  • Q : Managerial Economics Managerial

    Managerial Economics Meaning and definition Managerial economics general refer to the integration of economy th

    		•