Suppose That, for Example, in India, a Minimum Wage Is

question 18

Essay

Suppose that, for example, in India, a minimum wage is instituted in the modern sector above the market-clearing wage, while the rural traditional wage is market determined at a lower level than in the modern sector.
a.Describe the impact of this policy on the rural labor force, urban unemployment, and the rural wage.
b.Will the modern-sector wage be equal to the traditional-sector wage after markets equilibrate through migration? Explain.
c.What effect might moving costs have on the equilibrium you described in Part (b)?
d. What effect might the introduction of factories to rural areas have on the equilibrium you described in Part (b)?

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Definitions:

Neural Pathway

A series of connected neurons that transmit signals between different parts of the brain or between the brain and the rest of the nervous system.

Fovea

A small depression in the retina of the eye where visual acuity is highest, due to a high concentration of cones.

Phonemic Distinctions

The ability to recognize and differentiate between distinct phonemes, which are the smallest units of sound that can change the meaning of a word.

Native Language

The first language a person learns to speak, which is usually the language spoken in the family or community in which they were raised.