Microeconomics
DISCUSSION Forum
Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu.
Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu.
This week we are going to examine what happens in a market when the government intervenes in the market and introduces price controls. In particular we are going to examine what happens when the minimum wage is increased.
A minimum wage is a Price Floor. When a price floor is imposed on a market the price can be higher than the price floor, but not lower than the price floor.
In the labor market, the price is the wage rate. Thus, a minimum wage above the equilibrium wage increases workers wages, but it also decreases the quantity demanded of labor. In particular, it reduces the quantity demanded of unskilled and low skilled labor, especially youth labor.
Assignment Summary:
1) View the two videos above and videos 1, 2 and 7 under the YouTube Videos link for the week. You may also wish to view the other videos for a deeper understanding of price controls.
2) Read Chapter 6 in your textbook in careful detail. Pay close attention to the graphs in Figures 1 - 5. Focus on Figure 5 in particular. (The chapter and the figures are the same in both the 6th and the 7th editions of text book). You may also wish to review the CBO Report on employment and income impacts of an increased minimum wage.
3) Based on the videos, the readings and any additional research you decide to do (remember to cite and reference all your sources) what you do think will be the market impact(s) of the proposed increase in the federal minimum wage to $10 per hour?
a) Will the proposed increase help workers? And if so which part(s) of the labor market will be helped.
b) Which part(s) of the labor market will hurt by the proposed increase? How will they be hurt?
c) What will happen to the prices of goods and services produced with minimum wage labor?
4) What is your conclusion? Is this proposal a good idea or not? Explain why.
5) Post your views to the discussion board and refer to at least two different concepts from this week's Chapters. Your illustration of concepts MUST include an explanation why you think they are relevant to the week's topic using specific information from the articles, videos and other research that you have done.
MAKE SURE THAT YOU ADD SOMETHING NEW to the discussion.
6) Post on three different days for a minimum of three posts. Failure to meet these minimum posting requirements results in point loss.
• Include a word count on each post. All of your posts should sum to a minimum of 500 words.
• Each post submitted should be between 150 and 250 words. Keep them short, specific, and clear.
• Use paragraphs as appropriate.
• Very lengthy posts do not provide an incentive to be read.
• Remember to document all use of sources by using citations and references.These should be in APA format.
• Please review Plagiarism Powerpoints PLAGIARISM.ppt,and be sure to provide references and citations, including clickable URLs where appropriate, to all works that you cite APA.pptx.
Now click on the Discussion Forum text at the top of the page to be taken to the discussion board. You can start a new thread by clicking on the Create Thread button at the top. You can also respond to an existing post by clicking the Respond button at the bottom of the post.
Peer Responses
Stephanie Grullon Gonzalez
Discussion
Total views: 2 (Your views: 1)
In my opinion minimum wage jobs should only be for teenagers who are still unable to have a full time job due to their responsabilities at school, however, this is not a reality there are still parents out there who have to support their families out of a minimum wage pay, however even though increasing minimum wae will benefit these families it will also hurt the economy since it will force the government to also raise the cost of products, it will also mean that there are going to be less jobs availablewich will cause more people to be unemployed since the employers will only focus on the people they already have instead of investing in bringing in more personnel since it will mean using more of the profits that they already have, so in conclusion I believe that even though increasing the minimum wage will benefit the families that are already in the market it is totally not a good idea since it will mean that unemployed people will be affected, the government instead of investing in education will start investing in marketing since there is going to be no purpose of going to school if all jobs already pay good enough and last but not least the cost of living will be even higher.
References.
Khan Academy (2016) Minimum Wage and Price Floors. Retrieved from https://www.youtube.com/watch?v=j0c2vmFGbtk
Mankin, G.N (2015) Principles of Economics. Stanford. CT: Cengage Learning.
Trent Wetherald
Discussion
This week's topic is about an increase in minimum wage. I really don't think there should be any kind of increase on the minimum wage because this will limit the skills people will want to learn to better themselves. "The equilibrium wages of teenagers are low because teenagers are among the least skilled and least experienced members of the labor force" (Mankiw, 2015, p. 118)). I feel that if we continue to increase minimum wage, we will be encouraging teenagers to bypass college and continue to work in these positions rather than encouraging them to forgo other opportunities.
If the minimum wage gets bumped to $10 an hour there will be a lot more people unemployed because the small businesses and certain food chains will not be able to support that kind of jump in their business. If the law were to pass for an increase, than the workers will benefit by an increase in pay allowing them to bring in more money each week to support their families.
The business and Americans as a whole will lose because of the hike in unemployment. Any type of good or product businesses sell would increase in price to help the business afford the new employee wages. This would also raise the taxes on businesses costing them more than the $10 raise. As Mankiw says, "Rent and wage subsidies cost the government money, and therefore require higher taxes" (p. 121).
In conclusion I really don't think this wage increase will help anyone in the long run. I believe it will cause way more damage than good for our future in America.
References:
Mankiw, G. N. (2015). Principles of Economics. Stamford, CT: Cengage Learning.
If you elect to complete the Weekly Summary, focus your post on the key points that you have learned this week. A minum of 250 words for this assignment.