-In the Figure Above, D₀ Is the Demand for Labor

question 383

Multiple Choice

-In the figure above, D₀ is the demand for labor curve. Imposing a minimum wage of $6 per hour will initially

• A) increase employment from 20 to 40 million hours per year.
• B) increase employment from 30 to 40 million hours per year.
• C) decrease employment from 40 to 20 million hours per year.
• D) decrease employment from 30 to 20 million hours per year.

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Definitions:

Law of Diminishing Returns

An economic principle stating that, holding all else constant, as one input variable to the production process is increased, there comes a point when the added output from each additional unit of input decreases.

Productive

refers to the capability of producing significant amounts of goods and services, or contributing to economic output efficiently.

Intelligence

The ability to learn, understand, and make judgments or have opinions that are based on reason.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production labor.