Evaluation Points Flashcards
1
Q
Wage efficiency theory
A
- increases in the minimum wage may not reduce profits for firms because workers will work harder as the opportunity cost of losing their job is now higher
- this may increase productivity and could actually increase profits for the firm
2
Q
Good evaluation points for implementing a policy
A
- time lag
- how difficult is it to measure its success?
- does it only benefit one group of people?
- no guarantee of success
- opportunity costs
- monetary cost of implementation
- short run vs long run arguments
