Consider the accompanying figure representing the labor market below.
The imposition of a $12 per hour minimum wage causes total economic surplus in this labor market to ________ by ________.
A. rise; $400
B. fall; $1,600
C. rise; $800
D. fall; $800
Answer: D
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Bank reserves are:
A. currency and customer checking deposits. B. cash and similar assets held to meet depositor withdrawals or payments. C. any asset used to purchase goods and services. D. currency, customer checking and savings deposits.
Because cooperation dominates noncooperation as a strategy for maximizing profits, cheating is rarely if ever an issue that cartels have to contend with
Indicate whether the statement is true or false
The difference between moral hazard and adverse selection is that moral hazard is about:
A. unobserved characteristics of people occurring before parties enter into an agreement. B. never happens when adverse selection is a problem. C. actions that arise after the parties enter an agreement D. None of these statements is true.
Generally, which of the following is the most common reason why countries that experienced a financial crisis could not maintain their fixed exchange rate?
a. They were exporting too many commodities. b. The rates they had established were not in accordance with directives from the IMF. c. The exchange rate parities established were inconsistent with their corresponding macroeconomic policies. d. The general public refused to participate. e. The parities established made their currencies undervalued.