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Labor Market Data Price $5 $10 $15 $20 $25 Qs 1,000,000 3,000,000 5.000.000 7.000.000 9.000.000 9,000,000 7,000,000 5.000.000 3.000.000 1.000.000 Qd Price $30 $25 $20 $15 $10 $5 3 0 1 5 7 Quantity (In millions) Area of a triangle = 1/2 * base * height 9 Do Worth Publishers SCENARIO: The state government is considering raising the minimum wage from $15 per hour to $20 per hour over the next 3 years. As an economic advisor to the governor, you have been asked to provide a recommendation on whether the minimum wage should be increased based on economic theory. Consider the labor market data provided. Prepare a brief report that: 1. Explains whether the labor market is currently efficient at the equilibrium wage of $15 per hour. How would you know? At equilibrium, what (dollar amount) is the Total Surplus this market provides? Show your rationale with numbers. 2. Analyzes the impact on total surplus in the market if the minimum wage is raised to $20 per hour. Would total surplus increase or decrease? What is the new (dollar amount) Total Surplus? Show your rationale with numbers. 3. Provides a recommendation on whether the minimum wage should be raised to $20 per hour based on the goal of improving economic efficiency and total surplus in the labor market. Show your rationale with numbers. 4. On a personal level (not as the economic advisor of the governor), what are your thoughts on the idea of raising the minimum wage? Are you for it or against it? Explain your rationale. Questions & Reflection

Labor Market Data Price $5 $10 $15 $20 $25 Qs 1,000,000 3,000,000 5.000.000 7.000.000 9.000.000 9,000,000 7,000,000 5.000.000 3.000.000 1.000.000 Qd Price $30 $25 $20 $15 $10 $5 3 0 1 5 7 Quantity (In millions) Area of a triangle = 1/2 * base * height 9 Do Worth Publishers SCENARIO: The state government is considering raising the minimum wage from $15 per hour to $20 per hour over the next 3 years. As an economic advisor to the governor, you have been asked to provide a recommendation on whether the minimum wage should be increased based on economic theory. Consider the labor market data provided. Prepare a brief report that: 1. Explains whether the labor market is currently efficient at the equilibrium wage of $15 per hour. How would you know? At equilibrium, what (dollar amount) is the Total Surplus this market provides? Show your rationale with numbers. 2. Analyzes the impact on total surplus in the market if the minimum wage is raised to $20 per hour. Would total surplus increase or decrease? What is the new (dollar amount) Total Surplus? Show your rationale with numbers. 3. Provides a recommendation on whether the minimum wage should be raised to $20 per hour based on the goal of improving economic efficiency and total surplus in the labor market. Show your rationale with numbers. 4. On a personal level (not as the economic advisor of the governor), what are your thoughts on the idea of raising the minimum wage? Are you for it or against it? Explain your rationale. Questions & Reflection

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Labor Market Data Price $5 $10 $15 $20 $25 Qs 1,000,000 3,000,000 5,000,000 7.000.000 9,000,000 Qd 9,000,000 7,000,000 5,000,000 3,000,000 1,000,000 Price $30 $25 $20 $15 。 $10 $5 I 0 I 1 I I I T I I I I N I 1 I I -Y- 1 J Im 3 I " 2₂ Y J I I J I I T A J 7 I I I -t T 5 Quantity (In millions) Area of a triangle = 1/2 * base* height Market Efficiency & Total Surplus J 9 Do Worth Publishers SCENARIO: The state government is considering raising the minimum wage from $15 per hour to $20 per hour over the next 3 years. As an economic advisor to the governor, you have been asked to provide a recommendation on whether the minimum wage should be increased based on economic theory. Consider the labor market data provided. Prepare a brief report that: 1. Explains whether the labor market is currently efficient at the equilibrium wage of $15 per hour. How would you know? At equilibrium, what (dollar amount) is the Total Surplus this market provides? Show your rationale with numbers. 2. Analyzes the impact on total surplus in the market if the minimum wage is raised to $20 per hour. Would total surplus increase or decrease? What is the new (dollar amount) Total Surplus? Show your rationale with numbers. 3. Provides a recommendation on whether the minimum wage should be raised to $20 per hour based on the goal of improving economic efficiency and total surplus in the labor market. Show your rationale with numbers. 4. On a personal level (not as the economic advisor of the governor), what are your thoughts on the idea of raising the minimum wage? Are you for it or against it? Explain your rationale. Graphical Analysis The Minimum Wage Questions & Reflection PAGE 9
Transcribed Image Text:Labor Market Data Price $5 $10 $15 $20 $25 Qs 1,000,000 3,000,000 5,000,000 7.000.000 9,000,000 Qd 9,000,000 7,000,000 5,000,000 3,000,000 1,000,000 Price $30 $25 $20 $15 。 $10 $5 I 0 I 1 I I I T I I I I N I 1 I I -Y- 1 J Im 3 I " 2₂ Y J I I J I I T A J 7 I I I -t T 5 Quantity (In millions) Area of a triangle = 1/2 * base* height Market Efficiency & Total Surplus J 9 Do Worth Publishers SCENARIO: The state government is considering raising the minimum wage from $15 per hour to $20 per hour over the next 3 years. As an economic advisor to the governor, you have been asked to provide a recommendation on whether the minimum wage should be increased based on economic theory. Consider the labor market data provided. Prepare a brief report that: 1. Explains whether the labor market is currently efficient at the equilibrium wage of $15 per hour. How would you know? At equilibrium, what (dollar amount) is the Total Surplus this market provides? Show your rationale with numbers. 2. Analyzes the impact on total surplus in the market if the minimum wage is raised to $20 per hour. Would total surplus increase or decrease? What is the new (dollar amount) Total Surplus? Show your rationale with numbers. 3. Provides a recommendation on whether the minimum wage should be raised to $20 per hour based on the goal of improving economic efficiency and total surplus in the labor market. Show your rationale with numbers. 4. On a personal level (not as the economic advisor of the governor), what are your thoughts on the idea of raising the minimum wage? Are you for it or against it? Explain your rationale. Graphical Analysis The Minimum Wage Questions & Reflection PAGE 9
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