Is the minimum wage an example of a price floor or a price ceiling? Why?
What will be an ideal response?
The minimum wage is an example of a price floor. A price floor sets the lowest price at which it is legal to trade a particular good, service, or factor of production. The minimum wage is a price floor imposed in the labor market. The minimum wage sets the lowest price for which labor can be traded. It is illegal to buy (or to sell) labor for less than the minimum wage.
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Suppose the United States imports coffee from Brazil. Which of the following is a likely impact of this trade? a. The owners of the land used to grow coffee in the United States will be worse off
b. The producers of coffee-flavored candies in the United States will face higher costs of production. c. The consumers of coffee in the United States will face a higher market price. d. The workers in coffee plantations in the United States will be better off.
If the production of oranges reduces global warming, then the equilibrium quantity of oranges will be ________ the socially optimal quantity.
A. lower than B. equal to C. more valuable than D. higher than