Consider Two Labor Markets

question 89

Multiple Choice

Consider two labor markets.In the first,the elasticity of supply is relatively elastic,while it is relatively inelastic in the latter.Imposing a minimum wage in each market would result in ________ unemployment in the first market and ________ unemployment in the second.

• A) lower; lower
• B) higher; higher
• C) unchanged; unchanged
• D) lower; higher
• E) higher; lower

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Definitions:

Elastic

Describes demand that is sensitive to price changes, where a small change in price results in a significant change in the quantity demanded or supplied.

Dropping Price

A strategy involving the reduction of the price of a product or service with the aim of attracting more customers or selling off surplus stock.

Increased Sales

A rise in the number of products sold or services rendered, leading to higher revenue for a business.

Competitor-Oriented

Strategies or practices focused on understanding and reacting to the actions and market positioning of business competitors.