Economic theory supports the view that increasing the minimum wage will
A)increase the employment of teenagers.
B)decrease the employment of teenagers.
C)decrease the employment of unionized labor.
D)increase the number of monopsony firms.

Question

Quizplus · Accepted Answer

Economic theory suggests that increasing the minimum wage will lead to a decrease in the employment of teenagers as businesses may look to substitute younger, less experienced workers with older, more experienced workers who are willing to work for the same wage. Additionally, businesses may choose to automate certain tasks or outsource work to other companies in order to cut costs. This has been supported by various studies and empirical evidence in the past.

Economic Theory Supports the View That Increasing the Minimum Wage