-A Minimum Wage Set Above the Equilibrium Wage Rate Creates

question 30

Multiple Choice

-A minimum wage set above the equilibrium wage rate creates

• A) inefficiency because it creates excessive employment.
• B) efficiency because few workers lose their jobs.
• C) efficiency because workers can earn a living wage.
• D) inefficiency and a deadweight loss.
• E) efficiency because it increases most workers' wages.

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Definitions:

Primary Drives

Basic internal motivating forces in psychology, such as hunger and thirst, which drive behavior for survival.

Drive-Reduction Principle

A theory in psychology that posits motivation arises from biological needs that drive an individual to act in ways that reduce the drive and bring about a steady state.

Extrinsic Motivation

The desire to behave in a certain way to gain some external reward or to avoid some undesirable consequence.

Drive

An internal state of tension or arousal that is brought about by an underlying need and that an organism is motivated to reduce.