PrepTest 85, Section 3, Question 19
Economist: The wages of many of the lowest-paid corporate employees in this country would be protected from cuts by enacting a maximum wage law that prohibits executives at any corporation from earning more than, say, 50 times what the corporation's lowest-paid employees in this country earn. Currently, some executives try to increase corporate profits—and their own salaries—by cutting the pay and benefits of their corporations' employees. A maximum wage law would remove this incentive for these executives to cut the wages of their lowest-paid employees.
Economist: The wages of many of the lowest-paid corporate employees in this country would be protected from cuts by enacting a maximum wage law that prohibits executives at any corporation from earning more than, say, 50 times what the corporation's lowest-paid employees in this country earn. Currently, some executives try to increase corporate profits—and their own salaries—by cutting the pay and benefits of their corporations' employees. A maximum wage law would remove this incentive for these executives to cut the wages of their lowest-paid employees.
Economist: The wages of many of the lowest-paid corporate employees in this country would be protected from cuts by enacting a maximum wage law that prohibits executives at any corporation from earning more than, say, 50 times what the corporation's lowest-paid employees in this country earn. Currently, some executives try to increase corporate profits—and their own salaries—by cutting the pay and benefits of their corporations' employees. A maximum wage law would remove this incentive for these executives to cut the wages of their lowest-paid employees.
Economist: The wages of many of the lowest-paid corporate employees in this country would be protected from cuts by enacting a maximum wage law that prohibits executives at any corporation from earning more than, say, 50 times what the corporation's lowest-paid employees in this country earn. Currently, some executives try to increase corporate profits—and their own salaries—by cutting the pay and benefits of their corporations' employees. A maximum wage law would remove this incentive for these executives to cut the wages of their lowest-paid employees.
Which one of the following is an assumption the economist's argument requires?
All of the lowest-paid corporate employees in the economist's country are employed at corporations at which the executives earn more than 50 times what the corporations' lowest-paid employees in the economist's country earn.
Some corporate executives who cut the pay of their corporations' lowest-paid employees in the economist's country in order to increase their own salaries already earn less than 50 times what their corporations' lowest-paid employees in the economist's country earn.
No corporate executives in the economist's country would raise the wages of their corporations' lowest-paid employees in the economist's country unless such a maximum wage law linked executive wages to those of their corporations' lowest-paid employees in the economist's country.
If corporate executives could not increase their own salaries by cutting the pay and benefits of their corporations' lowest-paid employees in the economist's country, they would never change the wages of those employees.
If such a maximum wage law were enacted in the economist's country, one or more corporate executives would not cut the pay and benefits of their corporations' lowest-paid employees in the economist's country.
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