Which of the following statements accurately characterizes the effects of minimum-wage laws?
A)Some workers who might have been employed at a lower wage become unemployed.
B)Those workers who remain employed benefit from a higher wage.
C)The effects of minimum-wage laws depend strongly on the elasticity of demand.
D)All of the above accurately characterize the effects of minimum-wage laws.

Question

Quizplus · Accepted Answer

A) Some workers who might have been employed at a lower wage become unemployed.
B) Those workers who remain employed benefit from a higher wage.
C) The effects of minimum-wage laws depend strongly on the elasticity of demand.
D) All of the above accurately characterize the effects of minimum-wage laws.

B) Those workers who remain employed will benefit from a higher wage, which will increase their incomes, reduce poverty by raising the wage floor, and help close wage differentials.

C) The effects of minimum-wage laws depend strongly on the elasticity of demand for labor. Specifically, when demand is more elastic, a minimum wage will result in more unemployment and disemployment effects. When demand is inelastic, the impact on employment will be minimal.

Therefore, all three statements are accurate and D is the best choice.

Which of the Following Statements Accurately Characterizes the Effects of Minimum-Wage