Supporters of Raising the Minimum Wage Argue That Minimum-Wage Laws

question 28

Multiple Choice

Supporters of raising the minimum wage argue that minimum-wage laws are

• A)a tax-free way to help the working poor.Businesses bear the burden of paying higher wages, not the government.
• B)better than the Earned Income Tax Credit (EITC) in targeting the working poor.The EITC may benefit teenagers from middle-class families who work summer jobs at the minimum wage.
• C)better than in-kind transfers such as food stamps in providing food rather than unhealthy items such as drugs or alcohol.
• D)a way to increase employment of those likely to earn the minimum wage.

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Definitions:

Fixed Expenses

Fixed expenses are costs that do not change with the volume of output produced by a company, such as rent or insurance.

Operating Results

The financial outcomes of a company's core business operations, often represented by its income or loss from operations before interest and taxes.

Financial Advantage

A benefit or edge a person or business has that allows for better financial performance or opportunities than competitors.

Fixed Manufacturing Overhead

Costs associated with the production that do not vary with the level of output, including salaries of managers and rent of the factory.