An increase in the Federal minimum wage, assuming the minimum is higher than equilibrium wage and that all other things remain constant, will:
A) reduce the number of unemployed.
B) increase the number of unemployed.
C) shift the supply of labor to the right.
D) shift the demand of labor to the right.

Question

Quizplus · Accepted Answer

An increase in the minimum wage above the equilibrium wage creates a surplus of labor, as more workers are willing to work at the higher wage, but employers demand less labor, leading to increased unemployment.

An Increase in the Federal Minimum Wage, Assuming the Minimum