The Heart of the Argument Against an Increase in the Minimum

question 36

Multiple Choice

The heart of the argument against an increase in the minimum wage is one based on

• A)the macroeconomic argument.
• B)the elasticity argument.
• C)the work effort argument.
• D)consumer and producer surplus analysis.

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Definitions:

Roll's Critique

A theoretical argument suggesting that it is impossible to create a truly diversified market portfolio due to the vast number of assets in existence.

CAPM

Capital Asset Pricing Model, a formula used to determine the expected return on an investment based on its risk relative to the overall market.

True Market Portfolio

A theoretical bundle of all possible investments that are weighted by market value.

Stock's Alpha

Stock's Alpha measures a stock's performance relative to a benchmark index, indicating its value added or lost against the market average.