In Figure 30.2, a minimum wage of $20 will result in a
A) Shortage of 160 workers.
B) Shortage of 180 hours.
C) Surplus of 32 workers.
D) Surplus of 20 workers.

Question

In Figure 30.2, a minimum wage of $20 will result in a
A) Shortage of 160 workers. 
B) Shortage of 180 hours. 
C) Surplus of 32 workers. 
D) Surplus of 20 workers.

Quizplus · Accepted Answer

In Figure 30.2, a minimum wage of $20 crosses the labor demand curve at point A, where the quantity demanded is 480 hours and the quantity supplied is 512 hours. This means there is a surplus of 32 workers (512 - 480 = 32), which indicates that the supply of labor exceeds the demand for labor at the minimum wage of $20. Therefore, option C is the correct choice.