-The above figure shows the labour market in an undeveloped nation. If the minimum wage is set at
$5)00 per hour, what effect will it have on the market for low- skilled labour?

Question

Quizplus · Accepted Answer

Setting a minimum wage above the equilibrium wage rate in a labor market creates a surplus of labor because the quantity of labor supplied exceeds the quantity of labor demanded at that wage rate. Employers are less willing to hire at the higher wage, while more workers are willing to work, leading to unemployment among low-skilled workers.

-The Above Figure Shows the Labour Market in an Undeveloped