Minimum-Wage Laws Can Keep Wages

question 24

Multiple Choice

Minimum-wage laws can keep wages

• A)above equilibrium and cause a surplus of labor.
• B)above equilibrium and cause a shortage of labor.
• C)below equilibrium and cause a surplus of labor.
• D)below equilibrium and cause a shortage of labor.

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Definitions:

Labor Cost

Represents the total expenses incurred by employers to compensate their workforce, including wages, benefits, and taxes.

Ad Valorem Tariffs

A type of tariff calculated as a percentage of the value of the imported goods, as opposed to a fixed fee per unit.

Specific Tariffs

Taxes imposed on imported goods at a specific rate per unit, such as per ton or per item, instead of a percentage of value.

Tariff

A tax imposed on imported goods to protect domestic industries or to generate revenue.