Consider the accompanying figure representing the labor market below.
If a minimum wage of $12 per hour is imposed in this labor market, then:
A. 400 workers will earn $12 an hour.
B. worker surplus will fall.
C. total earnings will rise.
D. 200 workers will lose their jobs.
Answer: D
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Markets can fail when there is
A) a clear definition of property rights. B) common property. C) an absence of externalities. D) competition.
The total revenue received by sellers of a good is computed by:
A. Multiplying the price times the quantity sold B. Adding the price and the quantity sold C. Multiplying the %-change in price times the %-change in quantity D. Dividing the %-change in quantity by the %-change in price
Which of the following is likely to shift the labor supply curve to the right, assuming all else equal?
A) A rise in the wage rate B) A fall in the wage rate C) A fall in the population of the country due to a natural disaster D) A rise in the immigration of workers in search of better work opportunities
When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good
A) increases in terms of the amount foregone of the other good. B) decreases in terms of the amount foregone of the other good. C) remains constant. D) cannot be determined.