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:

Overreliance On Volume

The high dependency on sales volume to drive profit, risking profitability if volume decreases.

Overhead Applied

The allocation of manufacturing overhead to individual products or job orders based on a predetermined rate.

Actual Activity

The real measure of the volume of production or operation activities undertaken by a company within a specified period.

Estimated Overhead Cost

Estimated overhead cost refers to a projection or forecast of the total indirect expenses that will be incurred during a specified period in the production process.