The Economic Analysis of Minimum Wage Involves Both Normative and Positive

question 127

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.A minimum wage law benefits some groups and hurts others.
c.In some cities such as San Francisco and New York,it would be impossible for low-skilled workers to live in the city without minimum wage laws.
d.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses.
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:

Cassation

The highest level of judicial appeal process where a court's decision can be overturned or annulled, often found in civil law jurisdictions.

Convenience Sample

A sampling method where participants are selected based on their easy accessibility and proximity to the researcher.

Random Sample

A group of people selected from a broader population, where each person has the same likelihood of being chosen.

Stratified Sample

A sampling technique where the population is divided into subgroups (strata) and samples are drawn from each stratum to ensure representation of the whole population.