Question

SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the levelof teenage unemployment. The economist collects data on the values of the minimum wage and the levelsof teenage unemployment over time. The economist concludes that a 1% increase in minimum wagecauses a 0.2% increase in teenage unemployment. From this information he concludes that the minimumwage is harmful to teenagers and should be reduced or eliminated to increase employment amongteenagers.

Answer 1

Answer : Minimum Wage

Explanation: From the scenario analysis the minimum  wage should be reduced since its increasing the unemployment rate so that lesser wages would make the youth to work more for their salary.