Minimum Wage Laws Are Promoted as the Means of Increasing

question 11

Multiple Choice

Minimum wage laws are promoted as the means of increasing the standard of living of the working poor.Which of the following is the most likely adverse consequence of minimum wage laws that makes the working poor worse off?

• A)The least skilled workers are priced out of the labor market.
• B)Firms respond by increasing other forms of non-wage compensation such as training and holiday pay.
• C)The average price level declines,increasing the spending power of the people.
• D)The skilled workers end up receiving a below average wage rate.

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Definitions:

Gross Domestic Product

The sum of the market or monetary worth of all completed products and services generated inside a nation's borders during a particular time frame.

Maturity Stage

The phase in a company's or product's lifecycle when growth stabilizes and earnings are consistent.

Capacity Utilization

A metric that measures the extent to which a firm or economy is using its potential output capacity, often expressed as a percentage.

Breakeven Number

The point at which total cost and total revenue are equal, resulting in no net loss or gain, and is often used to analyze the financial viability of a project or business.