1) Why might one consequence of a higher minimum wage be that employers of low-skilled workers tend to reduce the number of sick days, amount of on-the-job training and health insurance, length of vacations, and number of coffee breaks? Use a graph as part of your answer. Finally, why might employers be quicker to fire workers for tardiness and other minor transgressions?
2) In regards to his hiring practices Howard Schultz, chairman and CEO of Starbucks says that: "We need happy people-we're a people company that serves coffee, not the other way around." Do you think that "happiness" would make for an effective job market signal? Explain.
3) It has been argued that politicians tend to gain from price controls and hence they advocate them. What line of reasoning would support that argument?