If the Equilibrium Wage in a Competitive Labour Market Is

question 111

Multiple Choice

If the equilibrium wage in a competitive labour market is $9 per hour,and the government raises the minimum wage from $7 to $8 per hour,what will be the effect in this market?

• A)the level of employment will decrease
• B)unemployment will increase
• C)unemployment will decrease
• D)there will be no effect on employment
• E)the average wage paid to workers will increase

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Definitions:

Marginal Utility

The additional satisfaction or benefit (utility) that a consumer derives from consuming an additional unit of a good or service.

Scented Candles

Candles infused with fragrance oils or natural aromatic extracts intended to emit a pleasant aroma when lit.

Consumer Surplus

The contrast between the full amount consumers are willing to invest in a product or service and the actual payment they make.

Action Figures

Small figures representing a character from a movie, comic book, video game, or television program, designed for play or collection.