Suppose a Minimum Wage of $4 an Hour Is in Force

question 107

Multiple Choice

Suppose a minimum wage of $4 an hour is in force, resulting in unemployment of 10 million hours. Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $5 per hour. What will happen to the equilibrium wage rate and employment?

• A)The wage rate is $5 an hour and there will be no unemployment.
• B)The wage rate is $5 an hour and there will be a surplus of labour.
• C)The wage rate is $4 an hour and there will be a surplus of labour.
• D)The wage rate is $4 an hour and there will be no unemployment.
• E)The wage rate is $4 an hour and there will be unemployment.

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Definitions:

Law Of Reciprocity

A social principle stating that if someone does something for you, you feel a compulsion to return the favor.

Organizational Politics

The activities aimed at improving someone's status or position within an organization and involve tactics like networking and alliance formation.

Empowers Team

The act of giving team members the authority, confidence, and resources they need to take initiative and make decisions to drive the team's success.

Socially Responsible

The practice of conducting oneself or an organization in a manner that benefits society at large, often involving ethical and sustainable decision-making.