Refer to Scenario 1

question 157

Multiple Choice

Refer to Scenario 1.1 below to answer the question(s) that follow.
SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.
-Refer to Scenario 1.1. The collection and use of the data on minimum wage and teenage unemployment over time is an example of

• A) law and economics.
• B) economic history.
• C) econometrics.
• D) empirical economics.

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Definitions:

Multiple-Zone Pricing

A pricing strategy where a company sets different prices for its products or services in different geographical areas based on local market conditions.

Promotional Pricing

A marketing strategy where temporarily reduced prices are used to increase short-term sales and visibility of a product or service.

Cruise Lines

Companies that operate cruise ships and offer sea voyages for vacation and leisure purposes.

Airfare

The price charged for a passenger flight.