Suppose the Labor Market for Plumbers Is in Equilibrium

question 46

Multiple Choice

Suppose the labor market for plumbers is in equilibrium. Which of the following might DECREASE the wage for plumbers?

• A) An economic boom increases the demand for new homes.
• B) The plumbers union establishes a rigorous certification test that is difficult for aspiring plumbers to pass.
• C) Unemployed manufacturing workers attend technical schools to learn the plumbing trade.
• D) A minimum wage is imposed in the market for plumbers.

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Definitions:

Standard Deviation

Standard deviation is a statistic that measures the dispersion or variability of a dataset relative to its mean, often used to gauge volatility.

Factor Portfolio

Factor Portfolio refers to a collection of financial assets that is constructed to have specific common characteristics, often used in factor investing.

Security Mispricing

The phenomenon when a security (stock, bond, etc.) is priced above or below its intrinsic value.

Risk-Free

Pertaining to an investment with guaranteed returns and negligible risk of financial loss.