Explain the relationship between the minimum wage and the unemployment rate for teenagers.
What will be an ideal response?
Increases in the minimum wage lead to increases in the unemployment rate for teenagers. Teenagers are eligible for low-skilled jobs. An increase in the minimum wage will help those teens whose MRP is high enough that they keep their jobs. But workers whose MRP is below the increased minimum wage will lose their jobs.
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The amount earned by owners of the nation's factors of production is
A) total income. B) private and government transfer payments. C) the wages and fringe benefits received by the nation's workers. D) all profits received by businesses.
The production possibilities frontier shows
A) what people want firms to produce in a particular time period. B) what an equitable distribution of products among citizens would be. C) the maximum attainable combinations of two products that may be produced in a particular time period with available resources. D) the various products that can be produced now and in the future.
Refer to the data. What quantities of X and Y should be purchased to maximize utility?
Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18.
A. 2 of X and 1 of Y
B. 4 of X and 5 of Y
C. 2 of X and 5 of Y
D. 2 of X and 6 of Y
"Full employment" refers to the situation when there is
A. 100% employment of the labor force. B. no frictional or structural unemployment. C. no cyclical unemployment. D. a 0% unemployment rate.