Consider the Accompanying Figure Representing the Labor Market Below

question 44

Multiple Choice

Consider the accompanying figure representing the labor market below. If a minimum wage of $12 per hour is imposed in this labor market, then:

• A)200 workers will lose their jobs.
• B)400 workers will earn $12 an hour.
• C)total earnings will rise.
• D)worker surplus will fall.

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Definitions:

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold.

Estimated Sales

A projection of the total sales in units or monetary terms for a future period, based on historical data, market trends, and other factors.

Direct Labor Wage Rate

The rate of pay for workers directly involved in manufacturing or producing goods, excluding indirect labor such as supervisors.

Direct Labor-Hours

A measure of the amount of time workers spend directly manufacturing a product, often used in costing and budgeting.