The Federal Minimum Wage Was $7

question 24

Multiple Choice

The federal minimum wage was $7.25 an hour after it was increased in 2009. In 1980, the minimum wage was $3.25 an hour. The CPI (1982-84 = 100) was 82.4 in 1980 and was 214.5 in 2009. Which of the following is true?

• A) The 1980 minimum wage is about $8.46 in 2009 dollars, so the minimum wage has gone down in real terms.
• B) The 1980 minimum wage is about $8.46 in 2009 dollars, so the minimum wage has gone up in real terms.
• C) The 1980 minimum wage is about $1.25 in 2009 dollars, so the minimum wage has gone down in real terms.
• D) The 1980 minimum wage is about $1.25 in 2009 dollars, so the minimum wage has gone up in real terms.
• E) The 1980 minimum wage is about $4.50 in 2009 dollars, so the minimum wage has gone up in real terms.

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Definitions:

Direct Labor-Hours

The total hours worked directly on the manufacturing of goods.

Direct Labor Rate

The average cost paid per hour of direct labor, typically used in calculating the direct labor costs of producing goods or services.

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require, aiming to more accurately reflect the resources consumed.

Direct Labor-Hours

The total number of hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating labor costs to products.