Refer to the graph shown. If government establishes a minimum wage at $7.25 per hour:
A. there will be a shortage in this labor market.
B. employers will be unable to find enough qualified applicants to fill the available positions.
C. the number of job seekers will exceed the number of job vacancies, resulting in some unemployment.
D. employers will be forced to hire 900 workers, resulting in reduced profits.
Answer: C
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If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year, we know that
A) the market basket used by the BLS must be changed next year to reflect consumers' new expenditures. B) the next year's CPI will be below 100. C) the next year's CPI will be above 100. D) the inflation rate is falling. E) the cost of the CPI market basket at next year's prices is lower than the cost of the CPI market basket at base period prices.
An important role of financial institutions is to
A) provide borrowers with low interest rates. B) provide information to lenders about the quality of financial claims issued. C) buy primary securities. D) control the money supply.
If a firm enlarges its factory size and realizes higher average costs of production then:
A. it has experienced economies of scale. B. it has experienced diseconomies of scale. C. it has experienced constant returns to scale. D. the long-run average cost curve slopes downward.
In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP, then GDP decreases
a. True b. False Indicate whether the statement is true or false