If Congress voted to eliminate the minimum wage,which of the following would most likely occur?
A) Decrease in unit costs and an upward shift of the aggregate supply curve
B) Decrease in unit costs and an upward movement along the aggregate supply curve
C) Decrease in unit costs and a downward shift of the aggregate supply curve
D) Increase in unit costs and an upward shift of the aggregate supply curve
E) Increase in unit costs and an upward movement along the aggregate supply curve.

Question

Quizplus · Accepted Answer

Removing the minimum wage would lead to a decrease in unit labor costs for firms. This would shift the aggregate supply curve downward because firms would be able to produce more output at every price level. As a result, the quantity of output supplied would increase, but the price level would decrease. Therefore, the correct answer is C).

If Congress Voted to Eliminate the Minimum Wage,which of the Following