HARVARD UNIVERSITY

                     DEPARTMENT OF ECONOMICS

ECONOMICS 10b SPRING 2015

                             Problem Set #3

                  (Due IN SECTION Friday, February 27th)

1. Mankiw, pages 606, #9.

   [Aside: For those interested in applying this question to current events, revisit the

   Summers reading from last semester -- Unit VI: "Some Simple Economics of

   Mandated Benefits" and then synthesize the effects of the Affordable Care Act

   and the debate on raising the minimum wage into this question. Additionally, the

   non-partisan CBO (Congressional Budget Office) has produced reports on the

   labor market effects of BOTH the Affordable Care Act AND...