Refer to Scenario 1

question 62

Multiple Choice

Refer to Scenario 1.1 below to answer the questions that follow.
SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.
-Refer to Scenario 1.1. The statement that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment is an example of

• A) the fallacy of composition.
• B) normative economics.
• C) positive economics.
• D) Ockham's razor.

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Definitions:

Political Centrists

Individuals or groups who hold moderate political views, advocating neither extreme left nor extreme right ideologies.

Median

A statistical measure representing the middle value in a set of data when it has been arranged in order.

Earth's Surface

The outermost layer of the Earth where humans live, including landforms, water bodies, and living organisms.

Equator

An imaginary line drawn around the middle of the Earth, equidistant from both poles, dividing the Earth into the Northern and Southern Hemispheres.