How Would Imposing a Minimum Wage Above the Market-Clearing Wage

question 5

Multiple Choice

How would imposing a minimum wage above the market-clearing wage affect employment in a competitive labor market?

• A) Employment would increase as previously unemployed workers would be more encouraged to find a job.
• B) Employment would increase because a higher minimum wage would create more jobs for low-skilled workers.
• C) Employment would increase as firms would illegally hire workers below the original competitive wage.
• D) Employment would be unchanged as workers are nonresponsive to low wages.
• E) Employment would decrease as some workers who are willing to work at the lower competitive wage would no longer be able to find work.

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Definitions:

Dunnett Test

A statistical test used to compare multiple treatments with a control in experimental studies.

Reference Group

A group used as a standard for comparison in a research study, often to evaluate the effects of a treatment or condition.

Analytic Comparison

The process of examining similarities and differences between variables or data sets to draw conclusions or make decisions.

Explained Error

The portion of the total variation in a dataset that is accounted for by the model's predictions.