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Minimum Wage And Market Failure

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A market failure may be the lack of ability of individuals to earn a living wage. The government may correct this failure by setting a minimum wage. Businesses may think that the minimum wage is too high to pay. Another failure may be high rate unemployment. The government may interfere by offering benefits. The government failure would be that the individuals choose to stay unemployed instead of looking for a job. The dollar flow of dollar incomes and spending goes in the reverse direction to the circular flow of goods and inputs. Consumers pay dollars for the shoes, pizza, and housing that they buy from businesses. Likewise, businesses pay dollars for the land, labor and capital goods that consumers can provide for them. The role of money

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