Asked by Sophony Henri on Jul 28, 2024
Verified
If the minimum wage is a binding price floor:
A) those who want to work will outnumber the jobs available.
B) the market-clearing equilibrium wage will increase.
C) there will be a job for everyone who is willing to work.
D) business owners will hire more workers.
Binding Price Floor
A minimum price set by the government above the equilibrium price, causing a surplus.
Minimum Wage
The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay their workers.
Market-Clearing
Market-Clearing is the process by which market supply and demand are brought into balance at the equilibrium price, ensuring all goods produced are sold.
- Immerse yourself in the study of price floors and their consequences for market balance.
- Evaluate the effects of minimum wage laws on employment and market dynamics.
Verified Answer
Learning Objectives
- Immerse yourself in the study of price floors and their consequences for market balance.
- Evaluate the effects of minimum wage laws on employment and market dynamics.
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