Ceteris paribus, all of the following result when the minimum wage is raised and is above the equilibrium in a competitive market, except
A. Some workers lose their jobs.
B. Workers with a marginal revenue product below the minimum wage are worse off.
C. There are fewer workers available to work.
D. There are fewer jobs available.
Answer: C
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Even if the Fed attempts to control an asset bubble by raising interest rates to any reasonable degree, it is not clear that overly-optimistic investors would respond
a. True b. False
The Fed may also lend to insolvent banks, rather than winding them down, in order to:
A. keep financial markets guessing about its strategy. B. address the problem of systemic risk. C. keep the money supply from falling too much. D. secure politically powerful allies.
If the Fed lowers its target for the federal funds rate, this indicates that
a. the Fed is pursuing an expansionary monetary policy. b. the Fed is pursuing a contractionary monetary policy. c. the Fed is attempting to combat inflation. d. the Fed is concerned that the growth in aggregate demand will exceed potential GDP.
Refer to the data. At $100 million of R&D expenditures, the:
A. marginal cost of R&D exceeds the marginal benefit.
B. marginal benefit of R&D exceeds the marginal cost.
C. expected rate of return from R&D is negative.
D. firm has exceeded its affordable level of R&D.