Suppose You Were to Hear an Economist Defend the Minimum

question 47

Multiple Choice

Suppose you were to hear an economist defend the minimum wage on the grounds that she estimated the productivity of workers both before and after an increase in the minimum wage and found that the increase in the minimum wage increases productivity by more (on a percentage basis) than it increased costs. You would know her to be relying on the ____ argument.

• A)macroeconomic
• B)elasticity
• C)work effort
• D)consumer and producer surplus

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Definitions:

Decreasing

Involving a reduction in amount, size, strength, or number; moving in a descending order.

β Value

A parameter in statistical models, especially regression analysis, representing the slope of the line of best fit or the degree of change in the dependent variable for a one-unit change in an independent variable.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, commonly denoted by alpha (α) and used to measure the strength of evidence against the null hypothesis.

α

Typically represents the level of significance in hypothesis testing, indicating the probability of rejecting the null hypothesis when it is actually true.