1. In Market C, suppose the workers receiving the minimum wage of 60 have higher income after the implementation of the minimum wage. Given this, which of the following statements are implied by our model? (Choose all that apply)

A: The workers will increase their consumption of normal goods

B: The workers will increase their consumption of inferior goods

C: The substitution effect will make the workers increase their demand for complementary goods

D: The workers' budget sets have increased

2. Which of the following statement about Human Capital are correct? (Choose all that apply)

1. Higher human capital for a worker implies a higher MPL

2. Higher human capital is a signal of efficiency wages

3. Education can increase an individual's human capital

4. Since wages are set by the market, two workers with different levels of human capital must have the same wage for the same job

3. Which of the following are plausible reasons that an individual would invest in their own education? (Choose all that apply)

1. Education increases human capital, so the individual will be able to earn a higher wage

2. Education may be a credible signal of high human capital, so the individual will be able to earn a higher wage

3. An individual may value education as a consumption good (for their own private benefit)

4. An individual observes that there is no compensating differential for education in a job that they desire

4. If a firm is in a competitive labor market and a competitive output market, which of the following explain why a firm's labor demand curve is downward sloping? (Choose all that apply)

1. Demand for the output good is downward sloping

2. The marginal product of labor is decreasing in labor

3. The marginal product of labor is negative

4. The labor supply is upward sloping

5. Which of the following statements about discrimination in the labor market are plausible? (Choose all that apply)

1. The profit motive for firms may mitigate a firm's desire to discriminate

2. Even if a firm does not want to discriminate, consumer discrimination may cause a firm to discriminate in the labor force

3. Wages are different across workers in similar jobs not only because of discrimination, but also because of other compensating differentials

4. There is no evidence of discrimination in the labor market