ECN 315 Module 3 Economic Theory Discussion Paper

User Generated

QQ223

Economics

ECN 315

ECN

Description

From an economic standpoint, evaluate the effect of a minimum wage on the market for low-wage labor. Include the following:

Discuss what economic theory predicts will happen

Draw a supply and demand graph illustrating the effect of a minimum wage

Discuss what elasticity conditions would economic theory prove to be true or false.

  • Adhere to the following standards:
  • Your paper should be three to five pages in length, not including the title or references pages.
  • Review the grading rubric, which is be found in the Week 3 folder.

Incorporate at least three scholarly references that are not required readings for this module. The CSU-Global Library is a good place to find these references.

Be sure to follow the CSU-Global Guide to Writing and APA Requirements (Links to an external site.).

  • Your paper should include an introduction, a body with at least two fully developed paragraphs, and a conclusion.
  • Second Paper: Module 4
  • In a carefully written paper, complete the following:
  • List the four components of Gross Domestic Product(GDP) and provide an example of each.

Explain how each item affects you and the way that you live today


User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Running head; EFFECTS OF A MINIMUM WAGE ON THE MARKET

Effects of a Minimum Wage on the Market
Student’s Name
Institution of Affiliation
Date

1

Running head; EFFECTS OF A MINIMUM WAGE ON THE MARKET

2

Effects of a Minimum Wage on the Market
According to the Bureau of Labor Statics (BLS), more than 1.6 million Americans earn
wages that are below the minimum earning rate set by the federal government. The lowest
amount that employers can pay their employees is called a minimum wage. This is also defined
as the lowest price below which employees cannot agree to sell their services or labor. The laws
that govern the minimum wages are different in various jurisdictions. Supply and demand
models indicate that in the presence of a minimum wage, warfare and loss of employment can
easily arise. Moreover, minimum wages have negative effects on a low-wage labor market.
The standard neoclassical theory argues that the establishment of a minimum wage above
the equilibrium price in the market can result in firms reducing their demand for labor. The firms
can achieve this by substituting the high priced low-wage workers with other inputs. These can
lead to the firms' output is reduced due to the high cost associated with labor. Sinha (2019),
argue that all factors being equal, when the minimum wage rate increases, it can bring about
major drawdowns on employment. The workers at the bottom of the wage distribution are the
ones who are greatly affected. The workers who are near the minimal rate of wages can end up
losing their jobs due to firms’ reduction of their demand for labor.
In the case of a growing economy, the minimum wages can lead to the reduction of the
employment opportunities being created by various firms. Workers who are lucky enough to
remain in their jobs after minimal wages increases benefit the most while those who lose jobs
suffer the most. There are other factors that can mitigate the results of unemployment due to the
increases in wages. For instance, if the economy is expanding, the number of workers earning a
wage that is below the minimum wage rate will below. This is because the labor demanded on

Running head; EFFECTS OF A MINIMUM WAGE ON THE MARKET

3

the part of the firms will be high and they will be competing for the available labor and this will
force them to increase their wage rate. When a firm increases its wage rate, it attrac...


Anonymous
This is great! Exactly what I wanted.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags