Question

If the government decides to raise the minimum wage,ceteris paribus:_________.

A) All workers are better off.
B) All workers are worse off.
C) Some workers are better off and some are worse off.
D) Workers are not affected by a minimum wage increase,only by a decrease.

Answer 1

C) Some workers are better off and some are worse off.

Step-by-step explanation:

If the government raises minimum wages, the cost of hiring labour increases and as a result, some firms would lay off some workers especially those that are low skilled labours.

As a result some would lose their jobs while others would benefit from the increased wages