Suppose That Studies Show That a Ten Percent Increase in the Minimum

question 102

Multiple Choice

Suppose that studies show that a ten percent increase in the minimum wage decreases the number of minimum wage jobs by one percent. That would be the case if

• A) demand for labor is inelastic.
• B) demand for labor is elastic.
• C) supply of labor is inelastic.
• D) supply of labor is elastic.

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Definitions:

Calendar Time

The concept of time as measured by calendar units, such as days, months, and years, used in planning and scheduling.

Long Run

An economic phase where all elements of production and expenses can fluctuate, enabling complete adaptation to any alterations.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market, equating to the opportunity cost of capital and resources.

Implicit Costs

Indirect expenses that do not involve a direct cash outlay but represent an opportunity cost, such as using resources for one purpose over another.