Analyze the impact of an increase in the minimum wage from the current level to $15 per hour. How would the following be affected?

a. employment of people previously earning less than $15 per hour.

There would be less people employed if the rate were to go from $7.25 p/hr to $15 p/hr. The cost of one employee at the rate of $15 p/hr would have been the cost of 2 employees at the rate of $7.25 p/hr.

b. the unemployment rate of teenagers.

Employers would be less likely to hire teenagers at the rate of $15 p/hr over someone who may have even minimal experience creating a much larger unemployment rate for teenagers.

c. the availability of on-the-job training for low-skilled workers.

At a $15 p/hr wage there would be minimal OJT as employers would be less likely to have someone in training for 2 weeks at that rate. People that have education or experience who may need a little tweaking for a particular job would be hired over those that have little to no experience and no formal education. This would be to mitigate the cost of training and having more productive people on the line from the time they start.

d. the demand for high-skilled workers who are good substitutes for low-skilled workers.

The demand for high-skilled workers who are good substitutes for low-skilled workers is already a thing. At one time having a high school diploma, set you apart when applying for a job, as time has progressed you see that the requirements for certain jobs require higher and higher degrees in those fields even to be able to apply. In certain areas you can make $15 p/hr if you have an associates degree or higher, that does not mean that the job requires a degree to be able to accomplish the job, but that is the only way you can make $15 p/hr.

Review the mechanics of price floors and price ceilings. Why does a price floor lead to surpluses?

A price floor such as an increase in minimum wage leads to a surplus of unemployed workers as employees will reduce the amount of people working to compensate for the increase in wages. They will now have 1 worker for the price of 2 workers.

Why does a price ceiling lead to shortages?

Price ceilings are caps on how much one can charge. If someone can only charge $600 for an apartment that may otherwise be valued at $900, they will find that the apartment complex will get filled and people will not want to leave, because if they leave they may have to pay more elsewhere, such as a house that is not controlled by the same parameters.

Review consumer and producer surplus. A price floor will lead to a transfer of consumer surplus to producer surplus; a price ceiling will lead to a transfer of producer surplus to consumer surplus; both price regulations lead to dead weight losses, which is a loss of surplus to society. Why?

In my perspective the price ceiling would create the greatest loss of surplus. With Government mandates imposing restraints, the once surplus of item X would now be within equitable reach for more people. The imposition of price restrictions would cause item X to be rapidly purchased, and what was once a surplus now becomes a deficit. With the deficit of item X, illegal ways of acquiring item X get introduced. The legal system cannot enforce illegal contracts or acts. Illegal activity effects us all in one way or another even if we do not see or feel the impact directly.