A Minimum Wage

question 39

Multiple Choice

A minimum wage

• A) increases all workers' surplus because the wage rate increases.
• B) increases consumer surplus because the price of the good decreases.
• C) decreases the firms' surplus because fewer workers are hired at the higher wage.
• D) increases the firms' surplus and the workers' surplus because it increases the efficiency of the labor market.
• E) None of the above answers is correct.

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Definitions:

Domestic Quantity Demanded

The total amount of a product or service that consumers in a specific country are willing to buy at a given price.

Hypothetical Nations

Imaginary or theoretical countries often used as case studies or models in economic theories or simulations to explore various economic scenarios.

Equilibrium World Price

The price at which the quantity of a good or service demanded globally equals the quantity supplied across countries, without trade barriers.

Domestic Quantity Supplied

The total amount of a good or service that producers are willing and able to offer for sale within a domestic market at a given price.