ECO 365 Week 4 DQ 1 - Latest Version 2014

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Answer the following questions about the current debate over raising the minimum wage.
1. Is a minimum wage an equilibrium wage, a price ceiling, or a price floor?
2. What are the Pros and Cons about raising the minimum wage? (Use economic theory to defend your pros and cons, don't just make them up. Make sure to discuss the PRICE ELASTICITY OF BOTH DEMAND AND SUPPLY FOR LABOR in your answer.)

A minimum wage is an example of a price floor (it is illegal to pay someone LESS than that amount.) As with ALL price floors that are ABOVE the market wage, there are two main impacts. FIRST: those who keep their jobs will make more money (PER HOUR). (This is "good" and is what those who favor raising the minimum wage point to in an effort to show how much they "care" about workers.)
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