-The figure above shows the market for low-skilled labor in Midland city in a nation to the south. The government sets a minimum wage at $6 per hour. With the minimum wage law enacted, at the quantity of labor employed, the value to the firm of last worker hired is ________ the wage rate for which that person is willing to work.

Question

Quizplus · Accepted Answer

The minimum wage set at $6 per hour is above the equilibrium wage, which means the value to the firm of the last worker hired is greater than the wage rate for which that person is willing to work. The difference is $3 per hour greater, as the equilibrium wage would have been $3 per hour less than the minimum wage.

-The Figure Above Shows the Market for Low-Skilled Labor in Midland