Evaluate the statement: All minimum wage workers will be better off if the minimum wage rises.
What will be an ideal response?
This is probably incorrect. The minimum wage workers who keep their jobs will be better off. But if the labor demand curve is downward sloping (and it most likely is for minimum wage workers), some workers will lose their jobs. Everyone (including the workers) will pay more for the goods and services produced by minimum wage workers.
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The market for smartwatches is becoming very competitive. The increase in competition in this market is an example of how the market responds to
A) changes in population. B) increases in income. C) changes in consumer tastes. D) decreases in the price of smartphones (a substitute for the product).
In the real world, the actual multiplier is ____ the simplified multiplier.
A. much larger than B. slightly larger than C. equal to D. much smaller than