Policies That Make It More Difficult to Fire an Employee

question 64

Multiple Choice

Policies that make it more difficult to fire an employee likely lead to:

• A) greater unemployment, because employers will be more hesitant to hire someone.
• B) greater unemployment, because employees will quit more often.
• C) less unemployment, because everyone will value their job more.
• D) less unemployment, because employers will not be able to fire as many people.

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing a measure of consumer satisfaction.

Producer Surplus

The difference between what producers are willing to accept for a good and the actual amount they receive.

Minimum Imposed Price

A price floor set by the government or an agency, below which the price of a product cannot legally fall.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specified period of time.