ECON-UA 1 Lecture Notes - Riemann Sum, Earned Income Tax Credit
8 May 2014
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Problem to be addressed: poverty: low pay, unemployment. Exceptions: small farms workers, seasonal workers, commission workers, work inside the home, tipped employees. W so supply curve in product market shifts left so p q ld . Also as w substitution of capital + new technology for unskilled workers (long run) Gainers: those who get jobs and get paid more. Losers: those who lose or don"t get jobs. 63% of workers paid minimum wage have another wage earner and household income is at least twice poverty level. Earned income tax credit (eitc): provides a wage subsidy to workers in households with income below a threshold. Advantages over minimum wage: people who need it get it, nobody loses jobs over it. Problem eitc is part of government budget so many politicians oppose. % qd = 2,000 / 10,000 = . 20 or 20% Midpoint rule: when calculating elasticity values we define the % qd =
