If a Minimum Wage Is Introduced That Is Above the Equilibrium

question 218

Multiple Choice

If a minimum wage is introduced that is above the equilibrium wage rate,

• A) the quantity of labor demanded increases.
• B) job search activity increases.
• C) the supply of labor increases and the supply of labor curve shifts rightward.
• D) unemployment decreases because more workers accept jobs at the higher minimum wage rate.
• E) the quantity of labor supplied decreases because of the increase in unemployment.

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Definitions:

Source Of Cash

Any activity or operation that brings in cash to a business, such as sales of goods and services, debt, or equity financing.

Common Stock

Represents ownership shares issued by a corporation, giving holders voting rights and a share in the company's profits via dividends.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions to shareholders, reinvested in the business.

Measure Of Liquidity

Indicators that demonstrate a company's ability to cover its short-term obligations with its liquid assets.