An Increase in the Minimum Wage Imposed by the Government

question 69

Multiple Choice

An increase in the minimum wage imposed by the government causes an increase in unemployment because:

• A)the labor supply curves are backward-bending.
• B)the demand curves for labor are downward-sloping.
• C)leisure is a normal good.
• D)the increase in the wage rate reduces the price of leisure.

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Definitions:

Labor Force

The total number of people who are currently employed or actively seeking employment within an economy.

Opportunity Cost

Represents the value of the best alternative that is foregone when a decision is made to pursue a certain action.

Household Income

The combined gross income of all members of a household, which can include wages, salaries, pensions, government benefits, and any other income.

United States

A country located primarily in North America, known for its large economy, diverse population, and significant influence in global affairs.