Suppose you were to hear an economist defend the minimum wage on the grounds that she estimated that when she estimated the saving rate of minimum wage workers and found it to be much smaller than the savings rate of employers. You would know her to be relying on the ____ argument.
A)macroeconomic
B)elasticity
C)work effort
D)consumer and producer surplus

Question

Quizplus · Accepted Answer

The economist is using a macroeconomic argument by comparing the savings rate of minimum wage workers and employers. This argument looks at the bigger picture of the economy rather than just the individuals or specific market factors (such as elasticity or consumer and producer surplus). The work effort argument would focus on the impact of the minimum wage on the effort and productivity of workers.

Suppose You Were to Hear an Economist Defend the Minimum