Define: a. wage rate b. derived demand c. minimum wage law

When we buy a cup of coffee from our favorite café, we're not just paying for the coffee; we're indirectly supporting the jobs of the baristas, the coffee bean growers, and everyone else involved in getting that cup of joe to our table. This is an example of 'derived demand', a term in economics used to describe the demand for labor or other factors of production that results not from the direct appeal of the product or service itself, but from the goods and services it helps to produce. In other words, the need for certain jobs or resources exists because there is a demand for the final output they contribute to creating.

Derived demand can be influenced by many factors, such as the consumer preferences for the end product, technological advancements, and the overall health of the economy. For instance, if electric vehicles become more popular, the demand for battery engineers, lithium miners, and electricians to install charging stations will rise due to this derived demand.

Imagine working full time and still not being able to meet the basic needs like food, shelter, and clothing. To prevent such scenarios, many countries adopt a 'minimum wage law'. This law mandates the lowest hourly, daily, or monthly remuneration that employers are required to pay their workers. Its primary goal is to establish a standard of living above the poverty line, aiming to reduce income inequality and protect low-income workers from exploitation.

The introduction of a minimum wage can have various impacts on the economy. While it might uplift the living standards of workers, it could also lead to employers hiring fewer workers or increasing prices to compensate for the higher wage costs. It's a delicate balance that policymakers have to negotiate, ensuring the minimum wage is adequate to support workers but not so high that it discourages hiring or hurts the economy.

Understanding the 'market forces of supply and demand' is like learning the ABCs in the language of economics. These forces are the invisible hands that guide the free market, determining the price and quantity of goods and services in the economy. The 'supply' represents how much the market can offer, while 'demand' refers to the quantity of a product or service that consumers are willing to purchase at various prices.

Imagine you're at an auction with a rare comic book up for grabs. If there are many avid collectors (high demand) and only one book (low supply), the price will likely skyrocket. Conversely, if that book isn't so popular (low demand) or there are many copies available (high supply), you could snag it for a bargain. The interaction between supply and demand determines the wage rate, affecting how much workers are paid. When there's a high demand for a particular skill set and a low supply of qualified workers, wages go up. On the other hand, if few employers need a skill that many workers have, the wage rate for that job will typically be lower.