The "Elasticity" Rebuttal to the Traditional Analysis of the Minimum

Multiple Choice

The "elasticity" rebuttal to the traditional analysis of the minimum wage, stating that employers' demand for workers is unresponsive to wage changes, centers on the idea that

A) the rich consume less than the poor out of extra income, therefore an increase in the minimum wage increases aggregate demand.
B) the rich consume more than the poor out of extra income, therefore an increase in the minimum wage increases aggregate demand.
C) people work harder when they feel they are adequately compensated therefore an increase in the minimum wage may pay for itself.
D) in the short run, the demand elasticity of labor is such that business will not reduce the number of workers hired when the minimum wage increases.