A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75. Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75
per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula.
What will be an ideal response?
percent change in quantity demanded = -5 percent.
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In the above figure, if the natural monopoly is regulated using an average cost pricing rule, but the firm can pad its costs and make the regulator believe its costs are LRAC (inflated), then the price the firm charges will increase from
A) $18 to $24. B) $12 to $24. C) $12 to $18. D) $18 to $36.
Assets whose returns have a high positive correlation are considered:
a. highly risky compared with those whose returns have lower or negative correlations.. b. completely risk free. c. less risky compared to those which have a low positive correlation. d. partially risky.