b) (3 points) July 2009 was the last time the federal minimum wage was raised to \( \$ 7.25 \) per hour. How much would this have been worth in May 1974 when the minimum wage was raised to \( \$ 2.00 \) per hour? Your answer should include the calculation you used and which cell from the Excel table you used to make your calculation. \[ =U 17^{*} 2 \]

To find out how much \( \$ 7.25 \) would be worth in May 1974 with a minimum wage of \( \$ 2.00 \), we can set up a ratio based on the years in question. From May 1974 to July 2009, we have approximately 35 years. If we assume inflation averaged around 3.5% per year, we could calculate the equivalent value by using the formula for future value of money. The calculation might look something like this: \[ \text{Equivalent Value} = \text{Current Value} \times (1 + \text{Inflation Rate})^{n} \] Using \( \$ 7.25 \) as the current value and \( n = 35 \), we can use an Excel cell, say \( =U17*(1 + 0.035)^{35} \), where \( U17 \) contains the \( \$ 7.25 \). Thus, \( =U17^{*} 2 \) would represent a simplified approach, indicating a basic multiplication rather than a detailed inflation model. Nonetheless, it’s crucial to remember that economic conditions and inflation rates fluctuate, so historical comparisons can often be more complex!