BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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raise employment and lower the wage rate
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raise the wage rate and increase employment
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raise the wage rate and decrease employment
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reduce the wage rate but boost employment
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Detailed explanation-1: -In a competitive labor market model, a minimum wage set above equilibrium causes a decrease in firms’ labor demand and displaces some workers from their jobs, thereby generating unemployment.
Detailed explanation-2: -Minimum wages have been defined as the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.
Detailed explanation-3: -A change in the wage or salary will result in a change in the quantity demanded of labor. If the wage rate increases, employers will want to hire fewer employees. The quantity of labor demanded will decrease, and there will be a movement upward along the demand curve.
Detailed explanation-4: -THE MINIMUM WAGES ACT, 1948 ACT NO. 11 OF 1948 1* [15th March, 1948.] An Act to provide for fixing minimum rates of wages in certain employments.