Which of the Following Statements About a Legislated Minimum Wage

question 2

Multiple Choice

Which of the following statements about a legislated minimum wage is true?

• A)In a competitive labour market,(if effective)it may increase wages and will increase employment.
• B)In a monopsonistic labour market,(if effective)it may increase wage rates but it must decrease employment.
• C)In a monopsonistic labour market,if set equal to the competitive wage,will increase wages and employment.
• D)It will have the same wage and employment effects in competitive and monopsonistic labour markets.
• E)It will have no effect if the market is monopsonistic.

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