If the Minimum Wage Law Sets a Wage Floor Below

question 61

Multiple Choice

If the minimum wage law sets a wage floor below the equilibrium wage in the market for unskilled labor,then the

• A) minimum wage will create a surplus of unskilled labor.
• B) minimum wage will create a shortage of unskilled labor.
• C) minimum wage will not impact the unskilled labor market.
• D) unskilled labor market will change,but we cannot be certain how.

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Definitions:

Earnings Per Share

This is a measure of a company's profitability, calculated by dividing the company's net income by the number of outstanding shares of its common stock.

Common Stock

Equity securities that represent ownership interests in a corporation, entitling holders to vote on corporate matters and receive dividends.

Earnings Per Share

A financial metric calculated by dividing a company's profit by the number of its outstanding shares of common stock.

Authorized Common Shares

The maximum number of common stock shares that a corporation is legally permitted to issue, as stated in its articles of incorporation.