Which of the following statements about the minimum wage is false?
A)The minimum wage causes a shortage of unskilled labor.
B)The minimum wage is an example of a price floor.
C)The minimum wage increases unemployment among unskilled workers.
D)More unskilled individuals are willing to offer their services in the labor market with a minimum wage than they would without it.
E)The minimum wage is set above the equilibrium wage.

Question

Quizplus · Accepted Answer

The minimum wage does not cause a shortage of unskilled labor; instead, it can lead to a surplus of labor because the minimum wage set above the equilibrium price increases the quantity of labor supplied while decreasing the quantity of labor demanded.

Which of the Following Statements About the Minimum Wage Is