A minimum wage that is less than the prevailing market wage will:
A. have no effect on the market.
B. increase unemployment.
C. increases wages.
D. reduce wages.
Answer: A
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Referring to Figure 19.2, the effect of a decrease in U.S. prices is represented by a movement from point
A) a to d. B) d to a. C) b to c. D) a to b.
Suppose drug companies come out with new wonder-drugs capable of curing the common cold. What is the most likely effect on the demand for physicians' services?
A) The demand will become more elastic. B) The demand will become more inelastic. C) The demand will decrease if government or private insurance pays all or most of the physicians' fees. D) The demand will increase if the drugs can only be obtained with a physician's prescription. E) The demand will not change, though the quantity demanded almost certainly will.