Assume That a Minimum Wage Is Created and Imposed Above

question 155

Multiple Choice

Assume that a minimum wage is created and imposed above the equilibrium wage in an otherwise perfectly competitive labor market.Which of the following will NOT occur as a result of this new law?

• A) The quantity of labor seeking jobs will rise.
• B) The unemployment rate will rise.
• C) The level of employment will increase.
• D) None of the above will occur.

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Definitions:

Minimum Return

The least amount of profit or yield expected from an investment, project, or venture to consider it desirable or viable.

Invested Assets

Resources that are obtained with the goal of producing income or profit.

Operating Income

Income generated from the normal business operations of a company, excluding expenses such as interest and taxes.

DuPont Formula

A formula that breaks down Return on Equity (ROE) into three components: profit margin, asset turnover, and financial leverage, to analyze a company's financial performance.