2) Which of the following is true for an effective minimum wage? A)The minimum w

Question

2) Which of the following is true for an effective minimum wage?

A)The minimum wage is less than market equilibrium.

B)There is a shortage of labor.

C)There is an increase in unemployment.

D)There is an increase in the number of jobs available for unskilled workers.

A)The minimum wage is less than market equilibrium.

B)There is a shortage of labor.

C)There is an increase in unemployment.

D)There is an increase in the number of jobs available for unskilled workers.

Which of the following are potential reasons for wages to vary among workers? (More than one may be correct) geographic area or location discrimination varying educational level different years of experience productivity marginal revenue product

Explanation / Answer

1. Education, experience and productivity. Type of econony affects wages and not geographic location. Marginal revenue product is product of marginal revenue and marginal oroduct which is included in productivity.

D. Is true.

Effective mininum wage is the minimum wage set up by government that should be paid to the workers. It increases number of jobs and hence unemployment decreases.

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