Suppose the Elasticity of Labor Demand Is Less Than 1

question 120

Multiple Choice

Suppose the elasticity of labor demand is less than 1 in absolute value. Imposing a minimum wage above the equilibrium wage will:

• A)increase the earnings of every worker.
• B)result in full employment.
• C)increase the earnings of workers as a group.
• D)make few workers better off.

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Definitions:

GAAP

Generally Accepted Accounting Principles; a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.

Accounting Standards

Formal guidelines and principles designed to improve the transparency and consistency of financial reporting and accounting practices.

Financial Statements

Financial statements are formal records of an entity's financial activities and position, including the balance sheet, income statement, and cash flow statement.

FASB

The Financial Accounting Standards Board, an organization responsible for establishing accounting and financial reporting standards in the United States.