The minimum wage is a controversial topic.

• Discuss what economic theory predicts will happen with a minimum wage set above the equilibrium wage rate.
• Draw a supply and demand graph illustrating the effect of a minimum wage.
• Discuss the Efficiency Wage Theory and explain why its predictions are not valid for a minimum wage.
• Discuss what elasticity conditions (labor demand/supply perfectly elastic, elastic, unitary elastic, inelastic, or perfectly inelastic) would be needed for the minimum wage to benefit low-income workers