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)?

---

Definitions:

Networks

A collection of interconnected people or organizations that exchange information and resources for professional or personal gain.

Best Referral System

refers to an efficiently designed process or program that encourages satisfied customers or clients to refer new customers or clients to a business.

Minimal Financing

Situations where businesses or projects operate with the lowest possible amount of financial investment or support.

Howard H. Stevenson

A professor and influential figure in the field of entrepreneurship, known for his work on the definition and concept of entrepreneurship.