Consider Two Groups of Workers Both Facing Identical Downward-Sloping Demand

question 6

Multiple Choice

Consider two groups of workers both facing identical downward-sloping demand curves.The labor supply curve of group A workers is relatively elastic,while that of group B workers is relatively inelastic.Which of the following will result if the government imposes a minimum wage in both these labor market?

• A)Group A workers will experience a higher disemployment effect than group B workers.
• B)Group B workers will experience a higher disemployment effect than group A workers.
• C)The total unemployment experienced by Group A workers will be higher than Group B workers.
• D)The total unemployment experienced by Group B workers will be higher than Group A workers.

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash accounts to compute cash flow from operating activities.

Operating Activities

Activities that relate to the core business operations of a company, including production, sales, and day-to-day administration.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, indicating the company's ability to expand, pay dividends, or reduce debt.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from revenues.