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AP® Computer Science Principles

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Moderate

Unemployment and Minimum Wage

APCSP-N1JYD4

Microeconomic theory suggests that imposing a price floor will lead to too little being purchased. In the labor market, this implies that implementing a minimum wage should increase unemployment.

Computer simulations based on this theory show imposing a minimum wage should increase unemployment. However, many studies suggest that in the real world, a minimum wage has little or no effect on the unemployment rate. In some cases, it appears that imposing a minimum wage actually decreases employment.

If one accepts that the minimum wage is not having the expected effect on unemployment, then:

Select TWO answers.

A

the models should be modified to better reflect what we are observing in the real world.

B

the data collected must be wrong, since it does not agree with the computer models.

C

the hypotheses related to the effects of a minimum wage on unemployment should be refined.

D

the computers are not running properly and that the encoded data must be wrong.