Minimum Wages Set Above the Equilibrium Wage Causing Increase in Total

question 72

Multiple Choice

Minimum wages set above the equilibrium wage causing increase in total labor income if

• A)demand for labor is elastic
• B)supply of labor is inelastic
• C)demand for labor is inelastic
• D)supply of labor is elastic

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Definitions:

Marginal Tax Rates

The rate at which your income above a certain threshold is taxed, showing the tax imposed on the incremental dollar of income.

Deductions

Amounts subtracted from gross income to determine taxable income, potentially reducing the amount of tax owed.

Marginal Tax Rate

The tax rate applied to the next dollar of taxable income, indicating the percentage of tax paid on any additional dollar earned.

Total Income

The sum of all earnings obtained from work, investments, and other sources before any deductions.