BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Higher costs
|
|
|
Difficulty attracting quality staff
|
|
|
Vulnerability to competition (especially from larger companies)
|
|
|
Lower overall wage costs
|
Detailed explanation-1: -A minimum wage is a legal minimum for workers. It means workers are guaranteed a certain hourly wage – helping to reduce relative poverty. However, a minimum wage could have potential disadvantages – in particular, there is the risk of creating unemployment as firms cannot afford to employ workers.
Detailed explanation-2: -(i) The workers do not get the full benefit of their efforts since the employee gets a share of the wages of the time saved. (ii) More wastage of raw materials may result due to over-speeding. (iii) The quality of work may decline as the workers want to rush through the work.
Detailed explanation-3: -Motivation. The main case for a minimum wage is that it helps poor and low-income families earn enough income. However, the potential downside is that it may discourage employers from using low-wage, low-skill workers. If minimum wages reduce employment for low-skill workers, winners and losers will emerge.
Detailed explanation-4: -Workers that are liable to higher occupational risks are compensated in the form of higher wages compared to those that are not. Finally, discrimination can lead to sizeable wage differentials. So, in the given options, option E is not one of the sources of wage differentials.