If the Median Wage Is $9 in Country X and $8

question 28

Multiple Choice

If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand,then a minimum wage of $4 in both countries will tend to:

• A) make unemployment higher in country X than in country Y.
• B) make unemployment higher in country Y than in country X.
• C) make unemployment the same in both countries.
• D) have no effect in either country.

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Definitions:

Anticipation Inventories

Stock held in anticipation of future demand or usage, allowing companies to meet customer orders without delay, often influenced by seasonal or forecasted demand increases.

Distribution Pipelines

Infrastructure used for transporting goods, utilities, or services from one point to another, often within a supply chain network.

Decoupling Inventory

Inventory kept in reserve to protect the production process from fluctuations in demand or supply, ensuring that operations can continue smoothly despite variability.

Consumption of Services

The process of using services provided by businesses or individuals, which can include anything from healthcare to recreational activities.