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- Tue May 03, 2016 10:56 am
#23852
Complete Question Explanation
Resolve the Paradox—#%. The correct answer choice is (A)
When the minimum wage is increased, companies usually lay off workers to contain the higher cost of labor. Paradoxically, a recent increase in the minimum wage did not affect the number of jobs in the fast-food industry. The question is why? The correct answer to a Resolve the Paradox question will actively resolve the paradox, that is, it will explain how the situation came into being. When examining answers, ask yourself if the answer choice contains a possible cause of the situation. If so, the answer is correct.
Answer choice (A): This is the correct answer choice. If the low job turnover in the fast-food industry allowed employers to save enough on recruiting costs to cover the cost of the wage increase, then no wonder they didn’t lay off workers: they didn’t need to resort to such drastic measures to contain costs. This answer choice provides a possible cause of the situation and is therefore correct.
Answer choice (B): Just because an increase in the minimum wage would normally lead to the elimination of lower and higher-paying positions, that does not explain why the fast-food industry was spared the expected lay-offs. The correct answer must address the peculiar situation in the fast food industry.
Answer choice (C): If the fast-food industry is no different from other industries employing minimum wage workers, this makes the paradox even more confusing. The correct answer must show why the fast-food industry is different from other industries, not why it is the same. Similarity cannot explain why the outcome of the wage increase was different from the one expected.
Answer choice (D): Even if some employees in the fast-food industry are paid more than the new minimum wage (and might not be affected by the wage increase), the information in the stimulus indicates that most workers in that industry are still being paid the minimum wage. This answer choice does not explain why employers were able to avoid laying off workers and is therefore incorrect.
Answer choice (E): Sales of fast food to minimum-wage workers is an irrelevant consideration and does not help explain the paradox. If anything, if sales did not increase, we would expect employers to be under pressure to contain costs by laying off workers. It is therefore even more puzzling that they didn't.
Resolve the Paradox—#%. The correct answer choice is (A)
When the minimum wage is increased, companies usually lay off workers to contain the higher cost of labor. Paradoxically, a recent increase in the minimum wage did not affect the number of jobs in the fast-food industry. The question is why? The correct answer to a Resolve the Paradox question will actively resolve the paradox, that is, it will explain how the situation came into being. When examining answers, ask yourself if the answer choice contains a possible cause of the situation. If so, the answer is correct.
Answer choice (A): This is the correct answer choice. If the low job turnover in the fast-food industry allowed employers to save enough on recruiting costs to cover the cost of the wage increase, then no wonder they didn’t lay off workers: they didn’t need to resort to such drastic measures to contain costs. This answer choice provides a possible cause of the situation and is therefore correct.
Answer choice (B): Just because an increase in the minimum wage would normally lead to the elimination of lower and higher-paying positions, that does not explain why the fast-food industry was spared the expected lay-offs. The correct answer must address the peculiar situation in the fast food industry.
Answer choice (C): If the fast-food industry is no different from other industries employing minimum wage workers, this makes the paradox even more confusing. The correct answer must show why the fast-food industry is different from other industries, not why it is the same. Similarity cannot explain why the outcome of the wage increase was different from the one expected.
Answer choice (D): Even if some employees in the fast-food industry are paid more than the new minimum wage (and might not be affected by the wage increase), the information in the stimulus indicates that most workers in that industry are still being paid the minimum wage. This answer choice does not explain why employers were able to avoid laying off workers and is therefore incorrect.
Answer choice (E): Sales of fast food to minimum-wage workers is an irrelevant consideration and does not help explain the paradox. If anything, if sales did not increase, we would expect employers to be under pressure to contain costs by laying off workers. It is therefore even more puzzling that they didn't.
