Refer to Scenario 1

question 45

Multiple Choice

Refer to Scenario 1.1 below to answer the question(s) 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. A graph of the value of the minimum wage on one axis and the level of teenage unemployment on the other axis is an example of

• A) an economic theory.
• B) an economic model.
• C) inductive reasoning.
• D) a variable theory.

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Definitions:

Conflict of Interest

A situation in which an individual's personal interests could potentially influence or appear to influence their professional judgment or responsibilities.

Shareholders' Meeting

A gathering of a company's shareholders, designed to inform them of the company's performance, elect the board of directors, and make decisions on corporate matters.

Fiduciary Duty

A duty to place a client’s interest above the professional’s own interests.

Debentures

A type of long-term security issued by a company, backed only by the general creditworthiness and reputation of the issuer.