Based on the assigned Wall Street Journal article “As wage debate rages, some ha

Question

Based on the assigned Wall Street Journal article “As wage debate rages, some have made the shift.”

In economics, there is a very precise meaning attached to the term “effective price floor.” You must apply that definition, and demonstrate that you know it, in your answer to the following question. When the federal minimum wage increases, is there one answer to whether that price floor is an “effective price floor”? Why or why not? Cite evidence from the article to support your claim. (2-4 sentences.)

Explanation / Answer

Here effective price floor refers to the minimum level of wage which is determined through the legislation.

Here are mix responses from market regarding whether the price floor is an effective price floor. some cases, price floor has reduced demand for labor drastically due to higher cost of higher people. But on other hand, there are examples where increase in wage rate has increased motivation of worker and now they tend to work in most efficient and productive way.

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