The Higher the Minimum Wage Is Above the Equilibrium Wage

question 307

Multiple Choice

The higher the minimum wage is above the equilibrium wage, the:

• A) greater is the number of low-skilled unemployed workers.
• B) smaller is the labor surplus among teenagers.
• C) smaller is the number of low-skilled unemployed workers.
• D) more likely it is for students to stay in high school and receive their diploma.

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Definitions:

Factory Overhead

Factory overhead encompasses all indirect costs related to manufacturing, such as utilities, maintenance, and management salaries.

Surplus

An excess of income or assets over expenditure or liabilities in a given period, typically a financial year.

Supervisory Cost

Supervisory cost involves expenses related to overseeing and directing operations or employees within a company, often including salaries of supervisors and related overhead.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services and are a significant component of manufacturing costs.