Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Implementing a minimum wage above the equilibrium level
B
Providing subsidies to employers for hiring low-skilled workers
C
Reducing tax incentives for companies
D
Increasing the availability of vocational training programs
Understanding the Answer
Let's break down why this is correct
Answer
In a labor market, wage rates are influenced by the supply of workers and the demand for labor from employers. When demand for workers increases, perhaps due to a growing industry or more job openings, employers may compete for talent by raising wages. If the supply of workers decreases, for example, if many people leave the workforce or if there are fewer qualified candidates, this can also push wages up as employers struggle to fill positions. A concrete example is when a tech company expands and needs more engineers; if there are not enough engineers available, they may offer higher salaries to attract qualified applicants. Therefore, interventions that boost demand for workers or reduce the available supply can lead to higher equilibrium wage rates.
Detailed Explanation
Setting a minimum wage above the current level means workers must be paid more. Other options are incorrect because Some might think giving money to employers will help them pay workers more; Reducing tax benefits for companies might seem like it would raise wages.
Key Concepts
wage determination
labor market interventions
Topic
Labor Market Equilibrium
Difficulty
medium level question
Cognitive Level
understand
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