What happens to the quantity of labor supplied, the quantity of labor demanded, and the number of unemployed workers if the minimum wage rate set above the equilibrium wage is increased still higher?
What will be an ideal response?
An increase in the minimum wage increases the quantity of labor supplied because more people are willing to work at the higher wage rate. It decreases the quantity of labor demanded because firms hire fewer workers since the cost of the workers (their wage rate) has increased. The increase in the quantity supplied combined with the decrease in quantity demanded leads to an increase in the number of unemployed workers.
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If a specific tax is implemented
A) the firm's average cost curve shifts up, resulting in lower profits. B) the after-tax marginal cost curve shifts, resulting in lower quantity produced. C) there is less profit per unit sold. D) All of the above.
If consumption = $5,000; investment = $800, government purchases = $700, exports = $30, imports = $60, and transfer payments = $340, then _____
a. GDP = $7,400 b. GDP = $7,740 c. GDP = $3,140 d. GDP = $6,470 e. GDP = $6,840