David Card and Alan Kruger Conducted a Study of Fast-Food

question 15

Multiple Choice

David Card and Alan Kruger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that

• A) there was a large reduction in employment of low-skilled workers when the minimum wage was raised in these states.
• B) the earned income tax credit is more effective in raising the incomes of low-skilled workers than increases in the minimum wage.
• C) increases in the minimum wage had a very small impact on employment.
• D) increases in the prices of food have a greater effect on wage increases in New Jersey than in Pennsylvania.

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Definitions:

Morally Wrong

Actions or behaviors that are considered unethical or contrary to societal or personal moral standards.

Efficiency

The extent to which resources such as energy, time, and money are well-used for the intended task or purpose, minimizing waste and maximizing outputs.

Employment Relationship

The formal linkage between employers and employees that dictates the terms of employment and is regulated by labor law and contract.

Profit Limitations

Restrictions or caps placed on the amount of profit that can be made, often in regulated industries or as part of economic policies.