Econ 100AHW 1: Supply and DemandSpring 2004 1. Use the Internet to determine the views of President Bush and at least two of the leading Democratic candidates for President about whether they want to raise or lower the minimum wage and why (you’ll probably only find a phrase or a sentence on their campaign Web sites). Give at least two reasons (someone benefits) for raising it and two reasons for leaving it alone or lowering it (someone is harmed). Your answer should be brief (certainly no longer than a page at the most). 2. Show that an increase in the minimum wage may (but does not necessarily) cause the total wage bill, wL(where wis the wage and Lis the hours worked by all employed workers) to rise. Under what conditions does it rise? You may show using graphs or math (calculus and/or elasticities). 3. Briefly (less than a page) make the cases for and against rent control (a price ceiling on the price that can be charged to rent an apartment). Discuss both efficiency and equity issues (consider short-run and long-run effects).
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