Refer to Scenario 1

question 80

Multiple Choice

Refer to Scenario 1.1 below to answer the questions 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. The statement, "the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers," is an example of

• A) marginal economics.
• B) normative economics.
• C) positive economics.
• D) the fallacy of composition.

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Definitions:

A Datum

A single piece of information or data point.

Specified Characteristic

A particular property or attribute that is identified for observation or measurement in a study.

Ascending Magnitude

A sequence or arrangement in which values increase in order from smallest to largest.

Traffic Congestion

A condition on transport networks that occurs as use increases, and is characterized by slower speeds, longer trip times, and increased vehicular queueing.