Question Eight

Many would argue that the demand for restaurant food is more elastic than the demand for grocery food. Given this fact, would you expect that the percentage of workers who lose jobs would be greater at restaurants or grocery stores? Justify your answer with an explanation of why the scale and/or substitution effect of the minimum wage increase would differ in the two industries. ( 5 marks)

Question Nine

Many cooks in restaurants currently earn above the minimum wage whereas most dishwashers and servers are paid the minimum. Would the increase in the minimum wage be likely to increase or decrease employment of cooks? Explain. ( 5 marks)