Suppose an island economy has only two labour markets - fishing (high skill)and farming (low skill).There are 1000 males and 1000 females in the labour force.There is an equal distribution of skilled and non- skilled workers among each sex.

-A legislated minimum wage is said to be binding when

Question

Suppose an island economy has only two labour markets - fishing (high skill)and farming (low skill).There are 1000 males and 1000 females in the labour force.There is an equal distribution of skilled and non- skilled workers among each sex.
 
-A legislated minimum wage is said to be binding when

Quizplus · Accepted Answer

A legislated minimum wage is said to be binding when it raises wage rates in an industry above the free-market equilibrium level. This means that employers are required to pay their workers more than the market value of their labor. This can lead to unintended consequences such as job loss, reduced hours, or increased prices for consumers.

Suppose an Island Economy Has Only Two Labour Markets -