A Binding Minimum Wage

question 158

Multiple Choice

A binding minimum wage

• A)affects employees but not employers.
• B)lowers the productivity of workers.
• C)raises the cost of labor to firms.
• D)All of the above are correct.

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Definitions:

Explicit Cost

Direct, out-of-pocket payments for goods or services used in the production of a product or offering of a service.

Sole Proprietor

An individual who owns and operates a business alone, bearing all the responsibilities and benefits of the business.

Short Run

A timeline in economics where at least one factor of production is fixed, constraining the ability to adjust to changing economic conditions.

Long Run

In economics, a period of time in which all factors of production and costs are variable and can be adjusted.