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In SanFrancisco, the minimum wage is$15 per hour. Restaurants that have more than 20 employees must also provide them with healthinsurance, paid sickleave, and paid parental leave. Inresponse, some restaurants hire fewer workers and ask customers to pick up their meals from a counter and bus their own dirty dishes. As a news article putit: "Restaurantshaven't developed a way to serve meals with less labor.They've gotten customers to do the labor they had been paying employees todo." One restaurant owner was quoted as saying that to hire workers to perform thesetasks, "a$10 hamburger would be a$20 hamburger, and itwouldn't make senseanymore."

Source: EmilyBadger, "San Francisco RestaurantsCan't Afford Waiters. SoThey're Putting Diners toWork," New York Times, June25, 2018.

1.) What does the restaurant owner mean by saying that a$20 hamburger"wouldn't makesense"?

A.

If the restaurant charged$20 for ahamburger, it would have to hire more workers and thatwouldn't make sense.

B.

The owner meant that he would have difficulty selling the hamburgers at a price of$20.

C.

The profit from selling a$20 hamburger would be less than the cost of an additional worker($10 profit < $15 wage).

D.

The restaurantowner's assessment isincorrect, as a$20 hamburger would increase profits and that makes sense.

2.) From the informationgiven, what can we conclude about the marginal revenue product of the servers in these restaurants relative to the compensationwage plus health insurance plus paid sick and parental leavethey wouldreceive?

Theservers' marginal revenue product was (greater than equal to OR less than) (choose one of the bolded answers) the compensation they would receive.

3.) Who gains and who loses from the cityregulations, as described in this newsarticle, that set the wages and other compensation firms in San Francisco are required topay?

In the followingtable, identify which groups gain and which groups lose as a result of thecity's labor regulations.

Restaurant workers who are able to keep their jobs

(choose one)

Lose

Gain

Business owners

(choose one)

Lose

Gain

Low-skill workers, such as dishwashers

(choose one)

Gain

Lose

Customers

(choose one)

Gain

Lose