When a Minimum-Wage Law Forces the Wage to Remain Above

question 290

True/False

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is higher and the quantity demanded of labor is lower than at the equilibrium wage.

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Definitions:

Yerkes-Dodson Law

A theory suggesting that there is an optimal level of arousal for the best performance on a task: too little or too much arousal can decrease performance.

Drive-Reduction Theory

A theory of motivation suggesting that biological needs create internal states of tension or drives, which organisms are motivated to reduce.

Primary Drives

Basic biological needs or desires, such as hunger and thirst, that motivate behavior.

Homeostasis

The tendency of a biological system to maintain stability while adjusting to conditions that are optimal for survival.