-In the Figure Above, If the Minimum Wage Is $8

question 73

Multiple Choice

-In the figure above, if the minimum wage is $8 per hour, then

• A) resources used in job-search activity increase compared to the situation before the minimum wage.
• B) the deadweight loss is minimised.
• C) it is legal to hire workers for a wage below the minimum wage because otherwise unemployment would result.
• D) Both answers A and B are correct.
• E) Both answers B and C are correct.

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Definitions:

T-Bill Rate

The yield or interest rate paid to investors of U.S. Treasury bills, a short-term government security.

SML

The Security Market Line, a representation in the Capital Asset Pricing Model (CAPM) that shows the expected return of a security or portfolio as a function of its systematic risk.

Expected Return

The anticipated amount of profit or loss an investment generates over a given period of time.

Standard Deviation

A statistical measure of the dispersion or variability in a set of data, often used in finance to quantify the risk associated with a security or investment portfolio.