Last fall Kmart increased its minimum hourly wage from $11 to $12 per hour, a move that affected more than 550,000 of its employees.This amount is well above the federal minimum wage of $7.25 per hour.

a) Explain, using concepts you have learned in this course, why Walmart increased its wage rate last fall.

b) Kmart competes for labor with companies such as Target that pay $15 per hour.Explain why it might make economic sense for Target to pay more than Kmart.Also explain why Kmart would think it makes economic sense to pay less than Target.

c) CVS also increased its entry level wage to $15 last fall.In addition, CVS announced that it would no longer require a high school diploma for entry level jobs such as cashier and stock clerk.Explain the economic logic behind CVS's decision to no longer insist on a high school diploma.