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Why do some workers lose their job when the minimum wage is​ increased?

A) The demand for labor is perfectly elastic.
B) The increase in the minimum wage decreases the quantity of labor demanded.
C) The increase in labor costs decreases the supply of the product, thereby raising the price of the goods so that the equilibrium quantity decreases to zero.
D) The demand for labor is perfectly inelastic.
E) The supply of labor decreases.

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manhokwe tawanda
manhokwe tawandaLv10
9 Oct 2020

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Related questions

. Low-skilled workers operate in a competitive market. The labor supply is Qs = 10W (where W is the price of labor measured by the hourly wage) and the demand for labor is Qd = 240 – 20W. Q measures the quantity of labor hired (in thousands of hours).

a. What is the equilibrium wage and quantity of low-skilled labor working in equilibrium?

b. If the government passes a minimum wage of $9 per hour, what will be the new quantity of labor hired? Will there be an excess demand or excess supply of labor? How large?

c. What is the deadweight loss of a $9 minimum wage?

d. How much better off does the $9 minimum wage make low-skilled workers (in other words, how much does producer surplus change), and how much worse off are employers?

Question 1

If the wage elasticity of demand for professors is -0.5, then an increase in the wage of professors from $45,000 to $55,000 will cause the quantity demanded to fall by how many percentage?

Question 2

If the quantity of auto workers demanded decreases from 66000 to 54000 when the equilibrium wage increases from $12 per hour to $14 per hour, then the wage elasticity of demand for these workers is elastic or inelastic?

Question 3

if the absolute elasticity of labor demand is 2.0, then an eight percent increase in the wage will decrease employment by how many percentage?

Importing goods produced by low-wage workers abroad decreases the demand for low-skilled U.S. labor that makes competing goods. Supply and demand analysis shows that the equilibrium wage rate of low-skilled workers making these competing goods and services will fall and experience bears this out. However, dire warnings that sweatshop labor conditions will be imported along with the foreign goods are unfounded. Suppose an employer in the United States faces competition from a foreign producer who pays the equivalent of $1 a day. Explain why, even if there were no minimum wage laws, this employer could not succeed by lowering the wage rates of his or her U.S. workers to $1 a day.

 

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