Suppose that an effective minimum wage law is introduced into some, but not all, firms in a perfectly competitive market. It is expected that employment in the covered sector will:
A.
rise.
B.
fall.
C.
remain unchanged.
D.
change in an unpredictable manner.
Suppose that an effective minimum wage law is introduced into some, but not all, firms in a perfectly competitive market. It is expected that employment in the covered sector will:
| A. |
rise. |
|
| B. |
fall. |
|
| C. |
remain unchanged. |
|
| D. |
change in an unpredictable manner. |
Related textbook solutions
Related questions
1.An effective minimum wage law introduced into a perfectly competitive labor market with complete coverage is expected to cause employment to:
A.rise.
B.fall.
C. remain unchanged.
D.change in an unpredictable manner.
2.An increase in an effective minimum wage in a monopsony labor market will cause employment to:
A.increase.
B.decrease.
C. remain unchanged.
D.change in an unpredictable manner, depending upon the magnitude of the increase in the minimum wage.
3.Suppose that a 10% increase in the wage results in a 5% reduction in employment. In this case, labor demand is said to be:
| A. |
elastic |
|
| B. |
inelastic |
|
| C. |
unit elastic |
4. The cross-wage (cross-price) elasticity of demand between labor and capital is positive when
| A. |
the substitution effect is larger than the scale effect. |
|
| B. |
the scale effect is larger than the substitution effect. |
|
| C. |
the wage rises, but not when the wage decreases. |
|
| D. |
None of the above is correct. |
