Which of the Following Would Be Associated with the Type

question 137

Multiple Choice

Which of the following would be associated with the type of unemployment created by the minimum wage law?

• A)Greg quits his job as a grocery cashier because he would rather work at the library.
• B)Fred decides to close his Thai restaurant because he cannot afford to pay workers the going wage.
• C)In hopes of earning a higher income, Bruce goes back to trade school to get further training.
• D)Liz pays the workers for her plumbing and heating company more than the equilibrium wage because she believes it will make them work harder.

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Definitions:

Normal Goods

Goods for which demand increases as the income of individuals increases, and vice versa.

Income Elasticity of Demand

An indicator of the responsiveness of the demand for a product to variations in consumer income.

Cross-Price Elasticity of Demand

A measure of how much the quantity demanded of one good responds to a change in the price of another good.

Quantity Purchased

The total amount of a good or service bought by consumers at a specific price level.