1. Castillo-Freeman and Freeman show the impact of the imposition of the U.S. minimum wage on Puerto Rico. Is this result helpful in explaining what might happen if the mainland U.S. minimum wage were increased? Why or Why not? (Hint: Use graphs where appropriate to explain your results.)

2. Currently more "large law suits" are filed for violations of State and Federal Fair Labor Standards Acts dealing with mandated breaks, lunch periods, and overtime than for Civil Rights issues. If a manager in a hypothetical company in retail sales called Widgets is making 50 percent of salary in bonuses based on store profits, and labor costs are the largest controllable marginal cost item, develop an incentive scheme to maintain profits but reduce the likelihood of expensive litigation that occurs through the violations of the Fair Labor Standards Act sections on breaks, lunch periods, and overtime.