Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour. An increase in the minimum wage to $7.50 per hour leads to
A) a shortage of housekeepers.
B) a surplus of housekeepers.
C) no change in the market for housekeepers.
D) an increase in the quantity of housekeepers supplied.
E) unemployment of housekeepers.

Question

Quizplus · Accepted Answer

Since the new minimum wage of $7.50 is below the current equilibrium wage of $8.60, it will not affect the market for housekeepers, as employers are already paying more than the minimum wage.

Suppose the Current Equilibrium Wage Rate for Housekeepers Is $8