If an Increase in the Government-Imposed Minimum Wage Pushes the Price

question 45

Multiple Choice

If an increase in the government-imposed minimum wage pushes the price (wage) of unskilled labor above market equilibrium, which of the following will most likely occur in the unskilled labor market?

• A) An increase in quantity of unskilled labor demanded.
• B) A decrease in the quantity of unskilled labor supplied.
• C) A shortage of unskilled labor.
• D) A surplus of unskilled labor (unemployment).

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Definitions:

Attitude

An attitude is a psychological construct representing an individual's degree of like or dislike for an item, person, thing, or event.

Belief

The acceptance that something exists or is true, particularly without proof.

Equity Theory

A theory that suggests that employees are motivated by fairness in the workplace and will adjust their input level to match their perception of fair treatment.

Job Inputs

The resources, effort, and time an employee contributes to their work tasks.