Answer to Question #94873 in Microeconomics for Farhaan Kodabaccus

Question

In 2002 the South African government introduced the minimum wage for domestic workers. With effect from the 1st of January 2019 it has been revised to R15 per hour with the exception of workers working fewer hours in certain areas.
https://www.parent24.com/Family/Finance_Legal/What-is-the-minimum-wage-for-domestic-workers-and-nannies-20150826 Accessed: 24/02/2019.
With the aid of a diagram, discuss the welfare effects of such a policy if the wage rate set is above the market clearing wage rate (assuming this is R12 per hour).

Answer 1

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