An increase in the minimum wage will benefit specific economic wage groups as outlined below:I). Employees at the minimum wage rate who remain employed will benefit, since they will receive more money.II). Many of the unskilled could lose their jobs. There would be fewer jobs for the currently unemployed such as less educated and untrained personnel (e.g., teenagers) who will have more difficulty finding work as firms reduce their labor force and pursue more efficiency.
Answer(s): A
Choice "a" is correct. Only I.Choices "b", "c", and "d" are incorrect, since II is a disadvantage - not a benefit.
The movement along the demand curve from one price-quantity combination to another is called a(n):
Answer(s): C
Choice "c" is correct. References to the change in quantity demanded refer to a single demand curve, which is downward sloping to the right.Changes in the quantity demanded result from changes in price. Choices "a", "b", and "d" are incorrect. All refer to changes in the demand curve itself, like an outward shift from curve D - D to D1 - D1.
Which one of the following would cause the demand curve for a commodity to shift to the left?
Choice "c" is correct. A rise in the price of a complementary commodity would cause a shift to the left in any demand curve (representing decrease in demand, at all price levels, for that product). With respect to complementary goods, the demand for the primary product is directly impacted by the demand (and hence the price changes) for the complementary goods. For instance, if the price of gasoline goes up, the demand for cars will decrease, causing the demand curve for cars to shift left. Choice "a" is incorrect. A rise in the price of a substitute product will make the demand curve shift to the right.Choice "b" is incorrect. A rise in average household income would make the demand curve shift to the right, representing an increase in demand.Choice "d" is incorrect. A rise in population, or a change in consumers' tastes in favor of the commodity are also changes that may cause an increase in demand, making the demand curve shift to the right.
In any competitive market, an equal increase in both demand and supply can be expected to always:
Answer(s): B
Choice "b" is correct. As illustrated above, a shift outward (increase) in supply increases quantity supplied at equilibrium. As illustrated, this is true even when demand increases. Choice "a" is incorrect. As illustrated, price may stay the same but quantity will increase. Draw the graph!Choices "c" and "d" are incorrect. Price may remain the same, but quantity will "always" increase.
When the federal government imposes health and safety regulations on certain products, one of the most likely results is:
Choice "c" is correct. One of the consequences of greater government regulation of certain products is the resulting higher cost to the consumer when the government imposes health and safety regulations on certain products it is likely that expenses will increase and that the added costs will be passed on to consumers in terms of higher prices. The total output for the product may decrease. Choice "a" is incorrect. Since the price goes up, consumption will decrease. Choice "b" is incorrect. The price can be expected to increase (see choice "c" above). Choice "d" is incorrect. Since the price goes up, supply goes down.
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