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Case Interview Prep

Category - Economics

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In Rhode Island, the minimum hourly wage that can be paid to someone above the age of 14 is $6.50. Minimum wage is an example of:
  1. government hegemony
  2. fiscal responsibility
  3. social engineering
  4. price floor
Explanation
Answer: D - Minimum wage is an example of price floor.

Key Takeaway: Price floors are government set limits on the minimum amounts that can be paid for goods. A minimum wage paid to workers is an example of a price floor and is devised to ensure that people are given adequate wages for survival.
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