In the Summer of 2009, the United States Federal Minimum

Multiple Choice

In the summer of 2009, the United States federal minimum wage was raised to $7.25. According to theory, what will likely be the result of the increase?

A) Some workers will leave the labor market.
B) Firms will hire more workers.
C) All workers prior to the wage increase will now earn at least $7.25 per hour.
D) Unemployment will increase as firms lay off workers.