Recall the Application About the Value of the Minimum Wage

question 59

Multiple Choice

Recall the Application about the value of the minimum wage between 1974 and 2007 and the impact
inflation has on the real minimum wage to answer the following question(s) . The following table is from
the Application. $\begin{array}{|l|l|l|}\hline&1974&2007\\\hline\text { Minimum wage per hour } & \$ 2.00 & \$ 5.85 \\\hline \text { Weekly income from minimum wage } & \$ 80.00 & \$ 234.00 \\\hline \text { Cost of a standard basket of goods } & \$ 47.00 & \$ 202.00 \\\hline \text { Number of baskets per week } & 1.70 & 1.16\\\hline\end{array}$

-Refer to the table above. What happened to the real value of the minimum wage between 1974 and 2007?

• A)It remained the same.
• B)It increased.
• C)It decreased.
• D)It could not be determined from the given information.

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Definitions:

Rational Bidders

Individuals or entities that make bids based on logical assessment of value and probability of winning in auctions or competitive contexts.

English Auction

A bidding process where participants openly bid against each other, with the item being sold to the highest bidder.

Reservation Price

The maximum price that a consumer is willing to pay for a good or service.

Willingness To Pay

The maximum amount a consumer is ready to pay for a good or service, indicating the value they place on it.