An Effective Minimum Wage ________ the Firms' Surplus and ________

question 47

Multiple Choice

An effective minimum wage ________ the firms' surplus and ________ the workers' surplus.

• A)decreases;increases
• B)increases;increases
• C)decreases;decreases
• D)increases;decreases
• E)has no effect on;has no effect on

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Definitions:

Appropriate Discount Rate

The interest rate used to discount future cash flows of an investment, reflecting the risk level and the time value of money.

Annual Dividend

The total dividend payment a company distributes to its shareholders for the year, often cited as a per share amount.

Dividends Increase

This is when a company decides to increase the amount of money distributed to its shareholders from its earnings.