U NIT10-Chapter 12: Problems 2, 8
Section C100 C HAPTER 12
(a) Unemployed people are most affected by minimum wage as the increase of minimum wage can increase
unemployment whereas the decrease in minimum wage can decrease unemployment.
(b) The law regarding minimum wage for workers increases unemployment because the value of the marginal
products will be met with fewer workers’ wages. This would cause more firms to hire workers at minimum wage,
and creating unemployment in levels of employment where wages are at a higher rate than minimum wage.
Education may be a form of competition among workers that are more prevalent with the higher minimum wage.
(c) No, the unionists are not just interested in the welfare of their poor cousins. Un