Evaluating statements from the concepts of minimum wage theory also monopoly marketplace
1. Compute the following quote from USA Today, March 22, 1988:
"Raising the minimum wage wouldn't result in fewer jobs because businesses would absorb the costs as they have absorbed other costs, according to Robert Mc Glotten, director of legislation for the AFL-CIO."
'Business doesn't hire people on the basis of wage,' he says, 'but on the basis of need.'
'If an individual with a particular kind of occupation is needed, then which occupation also the skill levels of the individuals would be matched with a wage rate,' he says.
Also the lost-job claim? McGlotten says critics made which argument whenever the minimum wage was 25 cents an hour. Also 'which's never been true at all.'?"
2. Give brief answers to every of the following:
(a) "Since a monopolist is the only supplier of a well-defined product, there is no limit to the price it may charge." Is this statement true or false?
(b) Elucidate why a monopolist will never set a price (also produce the corresponding output) at which the demand is price-inelastic.
(c) "The ultimate monopoly product would be one whose cross elasticity of demand, with respect to any also all other products, was zero." Comment.
(d) "The reason movie theatres charge youngsters also oldsters less than the rest of us are because theatre owners want to help these two low-income groups."