Figure: The Demand for Bricklayers (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers.The equilibrium market wage for bricklayers is $100 a day, but a minimum wage of $130 a day for bricklayers is set by the government.As a result:
A)six workers will now be hired by the firm.
B)three workers who otherwise would have been employed are now unemployed.
C)all bricklayers are better off.
D)construction firms will shut down.

Question

Figure: The Demand for Bricklayers  (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers.The equilibrium market wage for bricklayers is $100 a day, but a minimum wage of $130 a day for bricklayers is set by the government.As a result:
A)six workers will now be hired by the firm. 
B)three workers who otherwise would have been employed are now unemployed. 
C)all bricklayers are better off. 
D)construction firms will shut down.

Quizplus · Accepted Answer

The minimum wage of $130 a day is above the equilibrium wage of $100 a day. This means that firms are required to pay a higher wage to their workers than they would normally have to. As a result, firms will hire fewer bricklayers, since they are now more expensive than before. This leads to an increase in unemployment among bricklayers, as some workers who would have been employed at the equilibrium wage are now seen as too expensive to hire at the higher wage level. Therefore, choice B is the best answer.

Figure: the Demand for Bricklayers (Figure: the Demand for Bricklayers)