When the U

question 18

Multiple Choice

When the U.S.minimum wage was first passed in 1938,only 56% of workers were employed in covered firms.The incomplete coverage suggests that

• A) the partial equilibrium ignores the movement of workers from uncovered sectors to covered sectors.
• B) the decrease in employment is higher in general-equilibrium analysis.
• C) the general-equilibrium analysis suggests the wage in uncovered sectors will fall.
• D) all the workers will be worse off in both general- and partial-equilibrium analysis.

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Definitions:

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