Multiple Choice
A firm offers the optimal mix of wages and benefits.It is paying $5 an hour in wages and $3 in benefits.The minimum wage is then increased from $5.15 to $7 an hour.Assume all workers have the same utility curves (and have the usual shape) .If the firm continues to spend $8 an hour on workers,then
A) workers will be better off.
B) workers will be as well off as before.
C) workers will be worse off.
D) it is impossible to determine if workers are better or worse off without knowing if benefits are a normal or inferior good.
Correct Answer:
Verified
Correct Answer:
Verified
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