Answer Happy

1. During a discussion several years ago on building a pipeline to Alaska to carry natural gas, the U.S. Senate passed a bill stipulating that there should be a guaranteed minimum price for the natural gas that would flow through the pipeline. The thinking behind the bill was that if private firms had a guaranteed price for their natural gas, they would be more willing to drill for gas and to pay to build the pipeline. (a) Using the demand and supply framework, predict (best case scenario) the effects of a price floor mechanism on the gas prices in general. (b) Explain how quantity demanded and quantity supplied maybe affected by the price guarantee.
2. Suppose during a discussion several years ago on building a pipeline to Alaska to carry natural gas, the U.S. Senate passed a bill stipulating that there should be a guaranteed minimum price for the natural gas that would flow through the pipeline. The thinking behind the bill was that if private firms had a guaranteed price for their natural gas, they would be more willing to drill for gas and to pay to build the pipeline. (a) With the enactment of a price floor mechanism for natural gas, what are some of the likely unintended consequences in the natural gas market? (b) Suggest some policies other than the price floor mechanism that the government can pursue if it wishes to encourage drilling for natural gas and for a new pipeline in Alaska.
4. Explain why is it difficult to define a set minimum wage across the U.S.. (a) What are some obstacles to having a workable minimum wage policy from the employer's perspective. (b) In a pre and post pandemic economy, explain how two other related business concepts (i.e. labor costs, supply chain, rising production costs) compare to how the minimum wage policies have evolved over the past 2 years.
5. Whether the product market or the labor market, explain the outcome to the equilibrium price and quantity for each of the four possibilities: (a) increase in demand, (b) decrease in demand, (c) increase in supply, (d) decrease in supply.
6. Suppose ABC country's government introduced a 5% increase in the minimum wage. As a result, this increase causes a 5% reduction in the country's national employment level. (a) It is possible that a 5% increase in the minimum wage affect employers? If yes, explain two factors that is directly related to a change in the minimum wage. If no, explain two factors that is not directly related to a change in the minimum wage. (b) How would a 5% minimum wage affect current workers and potential workers? Explain two factors to support your response.