Why Do Some Workers Lose Their Job When a Minimum

question 128

Multiple Choice

Why do some workers lose their job when a minimum wage level is increased?

• A)The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero.
• B)The increase in the wage rate decreases the quantity of labor demanded.
• C)The demand for labor is perfectly inelastic.
• D)The supply of labor decreases.
• E)The demand for labor is perfectly elastic.

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Definitions:

Life Events

Life events are significant occurrences in an individual's life which can have profound effects on their physical and psychological well-being.

Physiological Response

The body's automatic reactions that occur in response to a stimulus or change in the environment.

Psychological Response

An individual's behavioral or mental reaction induced by psychological or emotional factors, often a response to an external event or internal thought process.

Adaptation

The process by which organisms adjust to changes in their environment in order to survive and reproduce.