Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The minimum wage was increased in 1996 amid cries by various economists that it would cause unemployment. Critics shown that the last time the minimum wage went up the similar dire predictions from economists were made, but more people were employed after the minimum wage increase. The similar, they argued, would occur again. Using isoquant-isocost analysis, analyze this situation and illustrate how it can be possible for increases in the minimum wage to have little impact on employment levels.
ANSWER: The confusion arises over what the minimum wage increase could do in the short run versus the long run. In the short run, capital is assumed to be fixed. As a result, the firm probably could continue to employ the same number of individuals as before the wage increase until the relatively cheaper capital would be obtained to substitute for the relatively more expensive labor. In the interim, if the demand for the roduct increased, the firm might find it profitable to expand output and therefore hire more capital and more labor. In the isoquant-isocost graph below, the firm is initially at point A. If the price of labor increases, the budget line pivots in to line BB´. To maintain production at the similar level as before, the firm must increase its budget allocation to allow it to return to point A. This is the optimum position in the results and short run in no decrease in the employment level. Thus, in the long run the firm will move toward point C as capital becomes available. If demand increases warrant a move to isoquant II, then it is seems that more labor and more capital will be employed even though the price of labor increases.
How the above would apply to non-renewable resources such as oil. This has general applicability to any competitive market. The issue here is that potential supply has a finite
Is Indian companies running a risk by not giving attention to cost cutting?
Suppose that there are n bidders whose valuations vis are drawn independently and identically from the distribution F over [0, ?]. Describe and derive the symmetric , monotonic equ
The price of oil increases because OPEC reduces oil production
Is it possible for a firm to experience a technological change that would increase the marginal product of labor while leaving the average product of labor unchanged?
Price Discrimination: occurs when the same product is sold at different prices to different consumers. A monopolist divided his consumers into groups and sells his product at vary
Question : (a) Using a simple example, diffrence between inter - industry trade and intra - industry trade? (b) Illustrate the reasons for the existence of external economie
Efficiency of exchange
please may you explain this concept
Modem theories of trade
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd