Figure 20-5

-Refer to Figure 20-5.If the government imposes a minimum wage above Wₒ,it is likely to

Question

Figure 20-5
 
-Refer to Figure 20-5.If the government imposes a minimum wage above Wₒ,it is likely to

Quizplus · Accepted Answer

According to the graph, if the government imposes a minimum wage above Wₒ, it will increase the cost of hiring workers. As a result, employers will reduce the quantity of labor demanded and the employment level will fall below Qo. Thus, option B is the correct choice. Option A is incorrect because an increase in the minimum wage will cause a decrease in employment, not an increase. Option C may or may not be true, as it depends on the extent to which wages are increased and where the increase is targeted. Option D is incorrect since the graph shows that a higher minimum wage reduces employment, and hence it has an effect on employment.

Figure 20-5 -Refer to Figure 20-5.If the Government Imposes a Minimum Wage