President Obama is hoping to increase the federal minimum wage to $10.50 per hour. Use a diagram to illustrate the effect this increase would have on unskilled labor if:1) demand for labor is nearly vertical.2) demand for labor is very elastic 
What will be an ideal response?
As the diagram above shows, the unemployment created by the law would be much lower with a nearly vertical demand for labor (L1-L3), than with an elastic one (L1-L2).
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Which of the following changes is most likely to happen when there is a decrease in the supply of money in a market that was initially in equilibrium?
a. The demand for money increases b. Planned investment spending increases c. Interest rate increases d. Aggregate expenditure increases e. The demand for money decreases
A market survey conducted by an electronics manufacturer reported a year on year growth in the sale of television sets, along with an increase in the selling price. Which of the following could be a likely cause for this situation?
a. A decrease in supply b. An increase in demand c. A decrease in demand d. An exception to the law of demand e. An increase in supply