-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $12 per hour, how many hours of students' labor are unemployed?

Question

Quizplus · Accepted Answer

The minimum wage is set at $12 per hour, which is above the equilibrium wage of $10 per hour. At this higher wage, the quantity of labor supplied exceeds the quantity of labor demanded, resulting in unemployment. The number of unemployed hours is the vertical distance between the supply curve and the minimum wage line, which is 6,000 hours.

-The Figure Above Shows the Demand for and Supply of Labor