Suppose the current wage of Type A workers is $5 per labor hour,while that of Type B workers is $7 per labor hour.If the government sets the minimum wage in the labor market at $8 per labor hour,which of these two groups would experience a higher increase in the wage rate and by what percentage?
A)Type B workers;the wage rate would increase by 10 percent
B)Type A workers;the wage rate would increase by 10 percent
C)Type A workers;the wage rate would increase by 60 percent
D)Type B workers;the wage rate would increase by 60 percent

Question

Quizplus · Accepted Answer

Type A workers' wage increases from $5 to $8, which is a $3 increase on a base of $5. This represents a 60% increase $(\frac{3}{5} = 0.6 \text{ or } 60\%$). Type B workers also see an increase, but their original wage is higher, so the percentage increase is less significant for them.

Suppose the Current Wage of Type a Workers Is $5