Figure 9-1
This figure shows the effect of a minimum-wage law.
-Refer to Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?
A) $4 and 20 workers
B) $5 and 30 workers
C) $5 and 40 workers
D) $6 and 40 workers

Question

Figure 9-1
This figure shows the effect of a minimum-wage law. 
-Refer to Figure 9-1. Which of the following describes the equilibrium point in the diagram where there is an absence of the minimum-wage law?
A) $4 and 20 workers 
B) $5 and 30 workers 
C) $5 and 40 workers 
D) $6 and 40 workers

Quizplus · Accepted Answer

The equilibrium point represents the point where the supply of labor (number of workers willing to work) equals the demand for labor (number of workers employers are willing to hire) and the wage rate is $5 with 30 workers employed. This is the point where there is an absence of the minimum-wage law, as shown by the horizontal line that intersects the labor supply and demand curves at this point.

Figure 9-1 This Figure Shows the Effect of a Minimum-Wage Law