Which of the Following Statements About a Legislated Minimum Wage

question 81

Multiple Choice

Which of the following statements about a legislated minimum wage is true?

• A)It will have no effect if the market is monopsonistic.
• B)In a monopsonistic labour market,(if effective)it may increase wage rates but it must decrease employment.
• C)In a competitive labour market,(if effective)it may increase wages and will increase employment.
• D)In a monopsonistic labour market,if set equal to the competitive wage,will increase wages and employment.
• E)It will have the same wage and employment effects in competitive and monopsonistic labour markets.

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Definitions:

Arbitrage

The practice of profiting from price differences of the same asset in different markets, exploiting inefficiencies without market risk by simultaneously buying and selling.

Expected Rate of Return

The mean amount of profit or loss one can expect from an investment, accounting for all possible outcomes.

Adjusted Beta

A measure that adjusts a security's beta (volatility relative to the market) based on its historical performance, to provide a more relevant estimation of its future volatility.

Unadjusted Beta

The beta of a stock calculated directly from historical data, without applying any adjustments for its specific characteristics.