The Higher the Minimum Wage Is Above the Equilibrium Wage

question 307

Multiple Choice

The higher the minimum wage is above the equilibrium wage, the:

• A) greater is the number of low-skilled unemployed workers.
• B) smaller is the labor surplus among teenagers.
• C) smaller is the number of low-skilled unemployed workers.
• D) more likely it is for students to stay in high school and receive their diploma.

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Definitions:

Isocost

Represents lines on a graph showing combinations of inputs that cost the same amount.

Capital

Capital refers to financial assets or the financial value of assets, such as cash and buildings, used by a business to produce goods and services.

Slope

The rate at which a line inclines or declines, representing the ratio of the vertical change to the horizontal change between two points on the line.

Isocost Line

A graphical representation of all the different combinations of inputs that can be purchased with a specific total cost.