If an Increase in the Minimum Wage Leads to Higher

question 6

Multiple Choice

If an increase in the minimum wage leads to higher aggregate earnings by the workers affected,then the own-wage elasticity of demand is

• A) elastic.
• B) inelastic.
• C) of unit elasticity.
• D) uncertain; more information is needed.

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Definitions:

Income Summary

An account in which the revenues and expenses are temporarily recorded to calculate the net income or loss for a period, before transferring to the capital account.

Capital

Refers to the financial assets or resources that individuals or businesses have available to invest or spend on building and growing their operations.

Expense Account(s)

Accounts used to record the costs incurred in the operation of a business, such as rent, utilities, and salaries, which are used to calculate net income.

Assets

Resources owned by a business that have economic value and can be used to meet debts or commitments.