The Minimum Wage Is An Example Of A Price Floor True False

Perhaps the best known example of a price floor is the minimum wage which is based on the normative view that someone working full time ought to be able to afford a basic standard of living.

The minimum wage is an example of a price floor true false. T f a price ceiling is a legal minimum on the price at which a good or service can be sold. In this case the wage is the price of labour and employees are the suppliers of labor and the company is the consumer of employees labour. T f one common example of a price floor is the minimum wage. A minimum wage is an example of a price floor and can be expected to cause a surplus of labor higher unemployment true false question 19 2 5 pts which of the following is correct at the quantity corresponding to the exact midpoint of a straight downward sloping inverse demand curve.

See full answer below. Minimum wage is an example of a price. On the figure below the labor market is in equilibrium. 48 minimum wage is an example of a price floor.

A binding minimum wage law is an example of a price floor and results in a surplus of labor. A true b false 49 a minimum wage set below the market equilibrium wage will result in higher unemployment. The federal minimum wage at the end of 2014 was 7 25 per hour which yields an income for a single person slightly higher than the poverty line. T f a price ceiling set above the equilibrium price is not binding.

A good example of how price floors can harm the very people who are supposed to be helped by undermining economic cooperation is the minimum wage. 51 if we define unemployment as a surplus of labor then a minimum wage set above the market clearing wage will increase the level of unemployment. Minimum wage is a price floor so discuss an. An example of a price floor is minimum wage laws where the government sets out the minimum hourly rate that can be paid for labour.

Unfortunately it like any price floor creates a surplus. In a labor market a minimum wage is an example of a price floor. A price floor sets the lowest legal price and that is precisely what a minimum wage does. 1 pts question 4 in the labor market the federal minimum wage of 7 25 per hour is an example of a price floor true false next previous 4 not saved submit quiz 24 search or type url g d question 5 1pts in the short run a firm shuts down if price is less than average total cost true false previous 4.

It sets the lowest legal wage rate. Legislating a minimum wage is commonly seen as an effective way of giving raises to low wage workers.