What are the effects of an increase in the minimum wage? Who would be most affected?
What will be an ideal response?
An increase in the minimum wage induces the quantity supplied of labor to increase and the quantity demanded of labor to fall, generating a surplus or an increase in unemployment. Since minimum wage legislation tends to affect lower skilled workers the most, the lowest skilled workers are most likely to be unemployed. These are often minority teenagers.
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Why is there NO persistent unemployment in the classical model?
A) Unionization creates job security for workers. B) The wage level adjusts to eliminate unemployment. C) The interest rate adjusts to eliminate unemployment. D) The rate of economic growth is always high enough to allow those who want to work at current wages to find jobs.
Considering the spectrum of market structures and moving from pure competition to pure monopoly we can say that
A) entry barriers get lower but exit gets more difficult. B) entry becomes harder but exit becomes easier. C) entry gets harder and the number of firms dwindles. D) none of the above.
In economics, all the items that people would consume if they had unlimited income are known as
A. wants. B. needs. C. aggregates. D. outputs.
In the above figure, the curve that represents the second most income equality is
A. a. B. b. C. c. D. d.