### Welfare of low skilled workers

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##### Reference no: EM1313417

Suppose the government is concerned that the going wage rate of \$6 per hour for low skilled workers is too low. In an effort to improve the "welfare" of such workers the government offers to pay each low skilled worker \$100 with the condition that they do not work any hours.

a. Can this plan succeed in increasing a worker's welfare? Demonstrate.

b. Must the plan be successful? Demonstrate.

c. From the worker's prospective, on what does the success of the plan depend? Explain.

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