If the Minimum Wage Was Currently Above the Equilibrium Wage

question 197

Multiple Choice

If the minimum wage was currently above the equilibrium wage, what would a decrease in the minimum wage do to the quantity demanded and quantity supplied of labour?

• A) It would increase both the quantity demanded and the quantity supplied of labour.
• B) It would decrease both the quantity demanded and the quantity supplied of labour.
• C) It would increase the quantity of labour demanded and decrease the quantity supplied.
• D) It would decrease the quantity of labour demanded and increase the quantity supplied.

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Definitions:

Retained Earnings

Refers to the portion of net income left over for the business after it has paid out dividends to its shareholders.

Surplus Cash

Excess funds that a company has after covering all its operational expenses, investments, and financial obligations.

Dividends

Distributions to shareholders from a corporation, often sourced from the entity's earnings.

Stock Dividend

A form of dividend payment made by a corporation to its shareholders in the form of additional shares, rather than cash.