A minimum wage law tends to

Question

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A minimum wage law creates more unemployment in low-skill job markets than in high-skill job markets because it increases the cost of hiring low-skilled workers. Employers may have to reduce the number of workers they hire in order to afford the increased wage rate, leading to higher unemployment among low-skilled workers. High-skilled workers may not be affected as much because their wages are already above the minimum wage. Option A is incorrect because not all teenagers work minimum wage jobs, and some may lose their jobs due to the increase in wage rates. Option B is incorrect because if the minimum wage rate is set above the competitive equilibrium wage, it may lead to reduced employment. Option C is incorrect because high-skill job markets may be able to absorb the increased wage rates without reducing employment as much as low-skill job markets.

A Minimum Wage Law Tends to