The Economic Analysis of Minimum Wage Involves Both Normative and Positive

question 49

Multiple Choice

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage: a.The minimum wage law causes unemployment.
B.Unemployment would be lower without a minimum wage law.
C.Minimum wage laws benefit some workers and harm others.
D.The minimum wage should be more than $7.25 per hour.
Which of the consequences above are positive statements and which are normative statements?

• A)a,b,and c are positive statements and d is a normative statement.
• B)a and b are positive statements,c and d are normative statement.
• C)Only a is a positive statement,b,c,and d are normative statements.
• D)a and c are positive statements,b and d are normative statements.

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Definitions:

Option To Terminate

A provision in a contract that allows one or more parties to end the agreement under certain conditions, before the completion date.

Force Majeure

A major, unforeseen, or unanticipated event that occurs and prevents the performance of a contract.

Frustrated Contracts Act

Legislation that deals with contracts that, through no fault of either party, cannot be fulfilled due to unforeseen events.

Termination Clause

A provision in a contract that outlines the conditions under which the agreement can be ended prior to the completion of its term.