The graph shows the labor market for fast-food workers in Sioux City. If the government sets a minimum wage of $7 an hour, then the labor market is ________, and marginal benefit ________ marginal cost
A) inefficient; is less than
B) inefficient; equals
C) efficient; equals
D) inefficient; is greater than
E) inefficient; cannot be compared to
D
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Suppose the banking system holds no excess reserves. If the required reserve ratio is 0.10 and the money multiplier is 2.5, what is the value of the currency-deposit ratio?
What will be an ideal response?
A firm operates and produces pollution that only harms an individual, Bob. The firm and Bob both know the costs and benefits of reducing pollution
Neither the firm nor Bob acts strategically while bargaining, and there are no transaction costs associated with bargaining. Explain how the efficient level of pollution occurs no matter whether the firm or Bob owns the property right to pollution.
How do investment in technology and investment in capital differ?
A. They have different effects on output because of the positive externalities associated with investments in technology. B. They have different effects on output because of the positive externalities associated with investments in capital. C. They have similar effects on output so they have no important differences from an economic point of view. D. They have the same effects on output but investments in technology are much more closely tied to the level of saving than investments in capital.
LightCo sells fairly standard light bulbs to Bodyworks, while BodyWorks sells components that can only be used by AutoCorp. LightCo is only interested in price while BodyWorks hires a law firm to negotiate its contracts with AutoCorp because:
A. BodyWorkshas market alternatives while LightCo does not. B. neither LightCo nor BodyWorks have market alternatives. C. LightCo and BodyWorks both have significant alternatives in the marketplace. D. LightCo has market alternatives while BodyWorks does not.