1.When the minimum wage is raised in a competitive market, ceteris paribus : Sel

Question

1.When the minimum wage is raised in a competitive market, ceteris paribus:

Select one:

a. All workers are better off.

b. All workers are worse off.

c. Some workers are better off and some are worse off.

d. Workers are not affected by a minimum wage increase, only by decreases.

2. Kelly will work more hours if her salary increases.

For Kelly, the ___________ effect must outweigh the __________ effect.

Select one:

a. substitution; income

b. income; substitution

c. income; utility

d. utility; substitution

Explanation / Answer

1) Option C = Some workers are better off and some are worse off.

The reason being, the people who are employed will benefit from it and as the minimum wage has been increased firms will try to employ less workers and will make the best use of the ones they have, hence it will be a disadvantage for the ones who are unemployed.

2) Option B = income; substitution

Hope my solution solves your query.

Regards.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.