• If demand elasticity is -0.25 and the minimum wage rises 60%, what happens to employment (in % terms)? Show your work. Put this result in an S&D diagram (from the initial wage, w1, you can show a "60% rise" to w2 ... and do something similar with q1 and q2). What is the trade-off you are illustrating? Comment on why you think this trade-off is "worth it" or not.
• Show and discuss how the results for a minimum wage change if the price elasticity of demand is more inelastic than the example above. That is, compare the outcome when elasticity is (-0.25) with a more inelastic reality in an S&D diagram (easiest if you show two demand curves - and one supply curve - in the same diagram). In which case is the minimum wage more effective, and why?
• Please explain it in detail and make it easy to understand because my English is not very well. Thank you so much for your help!