The Economic Analysis of Minimum Wage Involves Both Normative and Positive

question 22

Multiple Choice

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage:
a) The minimum wage law causes unemployment.
b) A minimum wage law benefits some groups and hurts others.
c) In some cities such as San Francisco and New York, minimum wage laws are necessary for low-skilled workers to stay in the city.
d) The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses.
Which of the consequences above are positive statements and which are normative statements?

• A)a, b, and c are positive statements and d is a normative statement.
• B)a and b are positive statements, c and d are normative statement.
• C)Only a is a positive statement, b, c and d are normative statements.
• D)a and c are positive statements, b and d are normative statements.

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Definitions:

Promotional Items

Products branded with a logo or slogan and distributed at little or no cost to promote a brand, corporate identity, or event.

Direct Expense

Costs that can be directly tied to the production of goods or services, such as raw materials and labor.

Salary Expense

The total amount paid to employees for their services during a specific period, excluding hourly wages.

Shoe Department

A specialized section within a store or business dedicated to selling shoes.