Economists who support minimum wage legislation are likely to believe that the:
(i) demand for unskilled labour is relatively inelastic
(ii) demand for unskilled labour is relatively elastic
(iii) supply of unskilled labour is relatively elastic

Question

Quizplus · Accepted Answer

Economists who support minimum wage legislation believe that the demand for unskilled labor is relatively inelastic. This means that there may not be a significant decrease in the demand for unskilled labor even if the minimum wage is increased, and employers may still need to hire workers at the higher wage. If the demand for unskilled labor was relatively elastic, an increase in the minimum wage would lead to a significant decrease in the demand for labor, as employers look to substitute labor with capital or other factors of production. The supply of unskilled labor being relatively elastic is not typically a key factor in economists' support for a minimum wage.

Economists Who Support Minimum Wage Legislation Are Likely to Believe