Passage 1 Raising the minimum wage for workers will provide a significant boost to the economy. For example, changing the minimum wage to $10.10 per hour would add $22 billion to the economy by increasing people’s purchasing power. Household spending would increase by $48 billion in one year with a similar minimum wage increase. Increased earnings lead to increased spending and a greater demand for products and services. This phenomenon then leads to the need for more workers and, thereby, job growth. Passage 2 The current federal minimum wage for workers is $7.25. If the government increased that by $1.75, studies show that household spending would also increase—by $48 billion annually. An economic move like this makes too much sense to ignore. A rise in household spending would mean an expansion in the profits of many businesses, including small businesses. As a small-business owner, I would certainly welcome the extra income. The last time the minimum wage was increased, my profit margin increased substantially. My fellow small-business owners experienced a similar profit growth that year. Which passage provides more effective evidence, and why? Passage 1 is more effective because the evidence is logical and does not include fallacies. Passage 1 is more effective because the evidence is logical and cannot be opposed. Passage 2 is more effective because the evidence is emotional and includes two perspectives. Passage 2 is more effective because the evidence is logical and is supported by anecdotes.

Question 13According the model of supply and demand, a significant increase in the minimum wage could have the effect of:1 pointcreating a shortage of labor.increasing the demand for labor.making it easier for workers to find jobs.making it harder for workers to find jobs.

(Consider a Macroeconomics perspective) Minimum wage is a government intervention on labour compensation which is equivalent to a price floor in the labour market. Although it aims to protect the well being of workers, it would also increase firms’  (three words). As a result, it would cause the  (two words) to shift leftward, resulting in a decrease in real output and an increase in the  (three words).

Based on our understanding of the labour market model presented in Chapter 6, we know that an increase in the minimum wage will cause:Question 11Select one:a.a reduction in the equilibrium real wage.b.no change in the equilibrium real wage.c.an increase in the equilibrium real wage.d.no change in the natural rate of unemployment.e.a reduction in the natural rate of unemployment.

If the government abolishes minimum wages, what kind of policy is this?

The graph above illustrates the labor market for teenage workers. The current minimum wage for all workers is W1. If Congress introduces a sub-minimum wage, W2 that applies only to teenagers, what is the most likely effect on teenage employment? aTeenage employment will increase because firms will want to hire more teenagers at W2 than at W1. bTeenage employment will increase because more teenagers will want to work at W2 than at W1. cTeenage employment will decrease because fewer teenagers will want to work at W2 than at W1. dTeenage employment will decrease because firms will want to hire fewer teenagers at W2 than at W1. eTeenage employment will stay the same because the market-clearing wage is lower than W1 and W2.