A Minimum Wage Set Above the Equilibrium Wage Rate Creates

question 67

Multiple Choice

A minimum wage set above the equilibrium wage rate creates

• A) efficiency because it increases most workers' wages.
• B) efficiency because few workers lose their jobs.
• C) efficiency because workers can earn a living wage.
• D) inefficiency and a deadweight loss.
• E) inefficiency because it creates excessive employment.

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Definitions:

Receivables Period

The average number of days it takes for a business to collect payments from its credit sales, also known as debtor's collection period.

Inventory Period

The average time it takes for a company to sell its inventory, indicating the efficiency of its sales and inventory management.

Payables Period

The average number of days it takes a company to pay its invoices from suppliers, reflecting the company's credit terms with its suppliers.

Inventory Period

The average time it takes for inventory to be sold and replaced over a given period.