Why Do Some Workers Lose Their Job When the Minimum

question 36

Multiple Choice

Why do some workers lose their job when the minimum wage is increased?

• A) The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero.
• B) The increase in the minimum wage decreases the quantity of labor demanded.
• C) The demand for labor is perfectly inelastic.
• D) The supply of labor decreases.
• E) The demand for labor is perfectly elastic.

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Definitions:

Deceptive Pricing

A misleading pricing strategy where the true price of a product is not clearly displayed or hidden behind misleading information.

Federal Trade Commission Act

A United States federal law established in 1914 to prevent unfair competition, deceptive acts, and to regulate antitrust.

Clayton Antitrust Act

A piece of legislation passed in the United States in 1914 aimed at preventing anti-competitive practices in their incipiency, specifically addressing issues of price discrimination, exclusive dealing agreements, and mergers and acquisitions that could potentially lead to monopolies.

Wheeler-Lea Act

An amendment to the Federal Trade Commission Act in the United States, focusing on protecting consumers from deceptive and unfair business practices.