A Binding Minimum Wage Is A(n) ______ for Labor

question 197

Multiple Choice

A binding minimum wage is a(n) ______ for labor.

• A) price floor
• B) price ceiling
• C) equilibrium price
• D) subsidy

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Definitions:

Equilibrium Price

The equilibrium price is the price at which the quantity of a good or service demanded equals the quantity supplied, leading to market balance.

Consumer Surplus

The contrast between the full amount consumers are willing to disburse for a product or service and the actual disbursement.

Price Floor

A government-imposed minimum price that can be charged for a good or service, intended to prevent prices from dropping too low.

Consumer Surplus

The differentiation between what consumers are prepared to expend on a good or service and the sums they actually do.