Unlearn eval NMW

Question 1

Unemployment however

Answer 1

Unemployment however a higher NMW will increase quanity supplied of labor and reduce quanity demanded creating unemployment

Question 2

Increase labour octs

Answer 2

Increase labour octs however a higher NMW will increase wage costs for firms increasing their prices and reducing their profit

Question 3

Reduces competivness

Answer 3

Reduces competivness higher prices will lead to inflation so more hotly uk firms become less competitive internationally especially against Germany who do not even have a minimum wage so our exports will suffer worsening our trade deficit

Question 4

Increase in black market

Answer 4

owever firms may continue to employ workers below mimic wage illegally

Question 5

Illegal employment

Answer 5

Illegal employment for example firms could hire illegal immigrants or pay unskilled workers in cash so theirs no evidence
Without being legally employed these workers have no rights so firms will take advantage if them mistreating them providing poor working conditions

Question 6

Elasticity however

Answer 6

Elasticity however if demand for unskilled labour is elastic which is likely because unskilled workers are easy to replace quanity demanded for labour will decrease by a large %

Question 7

Unemployment which will force government

Answer 7

Unemployment which will force government to increase benefits spending and lose income tax revenue working the budget deficit