Explain what would happen if the equilibrium wage in the labor market was below the legislated minimum wage
What will be an ideal response?
In this case the likely result will be unemployment. The higher wage will attract new entrants to the labor force (that is quantity supplied of labor will rise) but firms will hire fewer workers (the quantity demanded for labor will drop).
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If fiscal policy is going to exert a stabilizing impact on the economy, it must be
a. instituted by the Federal Reserve system. b. expansionary during an economic boom but restrictive during a recession. c. timed correctly. d. passed by a three-fifths majority in Congress.
Entrepreneurs
A. receive most of their income through inheritance. B. receive interest payments for their services. C. take risks in order to earn profits. D. are unemployed except during economic boom periods.
According to most economists, the development of markets is:
A. both a necessary and a sufficient condition for development. B. a sufficient condition for development but not a necessary condition. C. a necessary condition for development but not a sufficient condition. D. neither a necessary nor a sufficient condition for development.
Sadie just bought a new karaoke machine to replace her old one. Her old one works perfectly fine and would sell on Craigslist for $50. The fact that Sadie would not pay $50 for it, yet continues to let it sit in her closet unused is explained by:
A. ignored sunk costs. B. the implicit cost of ownership. C. irrationally considering sunk costs. D. the cost of admitting she likes karaoke.