Suppose There Is a Semiskilled Labor Market and Two Different

question 22

Multiple Choice

Suppose there is a semiskilled labor market and two different unskilled labor markets.Initially,all three markets are in competitive equilibrium.What would happen if the government imposed a minimum wage rate above the competitive equilibrium rate in one of the unskilled labor markets?

• A)Wage rates will rise in all three markets.
• B)Wage rates will rise in both unskilled labor markets,but remain unchanged in the semiskilled labor sector.
• C)Wage rates will rise in the semiskilled labor market and in the unskilled labor market covered by the minimum wage,but fall in the other unskilled labor market.
• D)Wage rates will rise in the unskilled labor market covered by the minimum wage,remain unchanged in the other unskilled labor market,and fall in the semiskilled labor market.
• E)Wage rates will rise in the unskilled labor market covered by the minimum wage,but remain unchanged in the other two markets.

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Definitions:

Indirect Method

A way of presenting a cash flow statement where net income is adjusted for changes in balance sheet items to reflect cash transactions.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, age, or obsolescence.

Patent Amortization

A method used to gradually reduce the carrying value of a patent over its useful life, reflecting its consumption, expiration, or obsolescence.

Indirect Method

The indirect method is a way of calculating cash flows from operating activities in a cash flow statement by starting with net income and adjusting for changes in balance sheet items.