Minimum Wage Case Study

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a) The elasticity of labor demand is the percentage change in employment resulting from the percentage change in wage. The amount of unemployment because of the increase in the minimum wage highly depends on the elasticity of labor demand. The more substitutable the workers are by machines, the more is the effect of the increase in the minimum wage. Jobs that are more elastic, have flatter labor demand curves, are less responsive to changes in minimum wage and lay off more workers due to the increase in the minimum wage than those that are inelastic and have steeper labor demand curves. (draw a picture).
b) I think that the increase in the minimum wage will have a greater effect in the lawn-care/landscaping industry than in the fast-food industry

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