Suppose Voters Choose to Increase Their State's Minimum Wage to $6

question 4

Multiple Choice

Suppose voters choose to increase their state's minimum wage to $6 per hour from $5 per hour.The accompanying figure shows the market for unskilled labor in that state after the change.Area(s) _____ is the total producer surplus after this change.

• A) B + D
• B) B + D + J
• C) B + C
• D) D + E + J

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Definitions:

Supply-Side Economists

Economists who believe that reducing barriers to production and encouraging the supply of goods and services is the most effective way to stimulate economic growth.

Incentives

Rewards or penalties intended to motivate specific behaviors or actions among individuals or entities.

Yield Curve Spread

The difference in yields between two different debt instruments, often used to gauge economic expectations.

T-Bond Yield

The annual return investors earn on U.S. Treasury bonds, which is a benchmark for long-term interest rates.