Several Members of Parliament Have Been Greatly Concerned About the Fairness

question 55

Multiple Choice

Several Members of Parliament have been greatly concerned about the fairness of salaries in the marketplace. They are contemplating enacting a law that would fix the wage rate at WA. Their aides have returned with the results of an investigation into the matter, as portrayed in Graphs A and B.
FIGURE 11-1

-Refer to Figure 11-1. If the wage law were NOT enacted, what would the prevailing wage rate and quantity of labour in the marketplace for K-12 teachers at equilibrium be?

• A) WB and Q1, respectively
• B) WA and Q2, respectively
• C) WA and Q3, respectively
• D) WB and Q2, respectively

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Definitions:

Negotiable

Refers to the quality of a document or instrument that allows it to be transferred or endorsed to another party, thus enabling the recipient to claim the rights specified in the document.

Authorized Agent

An individual or entity that has been given legal authorization to act on behalf of another person or entity in conducting business or legal affairs.

Drawer

The party that initiates a draft (writes a check, for example), thereby ordering the drawee to pay.

Commercial Money Market

A segment of the financial market where commercial banks, businesses, and government agencies raise funds by issuing short-term debt.