Which of the following statements about the minimum wage is correct?
A)An increase in the minimum wage enhances the well-being of all unskilled workers.
B)An increase in the minimum wage has no effect on the well-being of middle-class families.
C)Advocates of the minimum wage argue that the demand for labor is relatively inelastic.
D)Critics of the minimum wage argue that it is an undesirable way of helping the poor because it is costly to the government.

Question

Quizplus · Accepted Answer

Advocates of the minimum wage argue that the demand for labor is relatively inelastic, meaning that employers will not significantly reduce employment levels in response to an increase in the minimum wage. This is based on the idea that low-skilled workers are necessary for the operation of many businesses and therefore cannot be easily replaced. However, some economists dispute this claim and argue that an increase in the minimum wage could lead to job losses for some low-skilled workers.

Which of the Following Statements About the Minimum Wage Is