Consider the Accompanying Figure Representing the Labor Markets Shown Below

question 10

Multiple Choice

Consider the accompanying figure representing the labor markets shown below. If the government imposes a minimum wage above $6 per hour, then total earnings will ________.

• A)rise
• B)fall
• C)stay the same
• D)initially rise and then fall

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of a company’s profits and assets.

Par Value

Par value is the nominal or face value of a bond, stock, or other security, as stated by the issuing company in its charter.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuer, not considered when calculating earnings per share or dividends.