When States Pass Laws to Raise the Minimum Wage (Price

question 16

Multiple Choice

When states pass laws to raise the minimum wage (price of labor) , this leads to a(n) _____ in the labor market.

• A) increase in consumer surplus
• B) shortage
• C) increase in deadweight loss
• D) reduction in the equilibrium wage

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Definitions:

Regulated Industries

Sectors of the economy that are subject to governmental controls and regulations, often to protect public interest.

Decreased Prices

A situation where the cost of goods or services is reduced from a previous level.

Deregulation

Cutting back or doing away with state authority in a certain field, often to foster greater competition in that field.

Automotive

Refers to the design, development, manufacturing, marketing, and selling of motor vehicles.