Suppose a Firm Is Contractually Obligated to Pay Workers $25

question 109

Multiple Choice

Suppose a firm is contractually obligated to pay workers $25 per hour despite the fact that the market-clearing wage is $19 per hour. If there are 500 qualified applicants but only 350 job openings, it is likely that:

• A) the firm will hire 350 workers at $25 per hour and 150 workers at $19 per hour.
• B) the firm will go bankrupt.
• C) jobs will have to be rationed in some way, and the firm may use non-job-related qualities to do so.
• D) the market eventually will clear at a wage rate between $19 and $25.

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Definitions:

Theory of Evolution

A scientific explanation for the diversity of life on Earth, proposing that species change over time through processes such as natural selection.

Genes Influence

The impact that genetic makeup has on determining physical and behavioral traits in organisms.

Traits

Characteristics or attributes of an organism that are expressed by genes and/or influenced by the environment.

Genotypes

The genetic makeup of an organism, consisting of the alleles inherited from both parents that determine specific traits.