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Suppose That the Equilibrium Wage in the Low- Skilled Labour

Question 115

Multiple Choice

Suppose that the equilibrium wage in the low- skilled labour market is $15.25. Further, suppose the federal government raises the minimum wage to $15.00 an hour from its present level of $14.15. The government's action of increasing the minimum wage will result in


A) a shortage of low- skilled labour.
B) an increase in unemployment.
C) a decrease in unemployment.
D) neither a shortage nor a surplus of labour in the low- skilled labour market.

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