Figure 9-1 This Figure Shows the Effect of a Minimum-Wage Law

question 90

Multiple Choice

Figure 9-1
This figure shows the effect of a minimum-wage law.
-Refer to the Figure 9-1.If there was a minimum wage of $4 and then the government instituted a minimum wage of $5,what would happen to employment in this market?

• A) Unemployment would be unchanged.
• B) Unemployment would drop by 10.
• C) Unemployment would rise by 10.
• D) Unemployment would rise by 20.

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Definitions:

Perfectly Elastic Demand

Product or resource demand in which quantity demanded can be of any amount at a particular product or resource price; graphs as a horizontal demand curve.

Herfindahl Index

A measure of market concentration used to gauge the level of competition within an industry by calculating the sum of the squares of the market shares of each firm.

Concentration Ratio

A measure used in economics to assess the degree of market concentration, indicating the market share held by the largest firms in the industry.

Oligopolistic Manufacturers

Companies in an industry where a small number of firms hold a large market share, significantly influencing market dynamics.