A small province has a minimum wage of $12 per hour and the quantity demanded of minimum wage work or employment is 20 million hours. It proposes to increase the minimum wage by 25% to $15 per hour and you have estimated that the price elasticity of demand for minimum wage workers is -1.10. (For all the questions below show your caculations.)
a.What are the total wages paid to minimum wage workers before the increase? (Total wages paid = wage rate x number of hours worked) (or essentially: Revenue = P x Q)
b.What will be the percent change in the quantity demanded of minimum wage work if the minimum wage is increased by 25%?
c.What will be the number of hours of employment for minimum wage workers if the minimum wage is increased?
d.What will be the total wages paid to minimum wage workers after the increase in the minimum wage rate? (Total wages = wage rate x number of hours worked)
e.Would the proposalâs expected negative outcome for minimum wage workers (reduced earnings) be a concern if the price elasticity of demand were 0.65? Explain in a few words.
A small province has a minimum wage of $12 per hour and the quantity demanded of minimum wage work or employment is 20 million hours. It proposes to increase the minimum wage by 25% to $15 per hour and you have estimated that the price elasticity of demand for minimum wage workers is -1.10. (For all the questions below show your caculations.)
a.What are the total wages paid to minimum wage workers before the increase? (Total wages paid = wage rate x number of hours worked) (or essentially: Revenue = P x Q)
b.What will be the percent change in the quantity demanded of minimum wage work if the minimum wage is increased by 25%?
c.What will be the number of hours of employment for minimum wage workers if the minimum wage is increased?
d.What will be the total wages paid to minimum wage workers after the increase in the minimum wage rate? (Total wages = wage rate x number of hours worked)
e.Would the proposalâs expected negative outcome for minimum wage workers (reduced earnings) be a concern if the price elasticity of demand were 0.65? Explain in a few words.
