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:

Open-Ended

A type of question or query in surveys and research allowing for unrestricted responses, inviting elaboration and subjectivity.

Closed-Ended

Referring to questions or questionnaires that provide specific responses options, limiting participants' answers to those options.

Significant Social Problem

A societal issue that is pervasive, persistent, and causes harm to individuals or communities, requiring intervention.

Interviewer Bias

The effect that the presence or action of an interviewer may have on the response of the interviewee, potentially skewing results.