Consider the accompanying figure representing the labor market below.
If a minimum wage of $12 per hour is imposed in this labor market then worker surplus will ________ and employer surplus will ________.
A. stay the same; fall
B. fall; fall
C. rise; fall
D. rise; stay the same
Answer: C
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When recessions are the result of slowing growth in potential output, the government's best policy is to:
A. decrease aggregate supply. B. promote saving and investment. C. reduce government spending. D. increase aggregate demand.
Refer to Figure 2-1. ________ is (are) unattainable with current resources
A) Point A B) Point B C) Point C D) Points A and C
Of all barriers to entry, the most important are those that are due to
A) economies of scale. B) government-imposed barriers. C) the Herfindahl-Hirschman Index. D) ownership of a key input.
Which one of the following would count as investment in the GDP accounts?
a. Purchase of a new airplane by an airline. b. Purchase of a U.S. government bond. c. Purchase of 100 shares of Wal-Mart stock. d. Purchase of an existing house.