If the minimum wage law sets a price floor above the equilibrium wage in the market for unskilled labor,then the
A) minimum wage will create a surplus of unskilled labor.
B) minimum wage will create a shortage of unskilled labor.
C) minimum wage will not impact the unskilled labor market.
D) unskilled labor market will change,but we cannot be certain how.

Question

Quizplus · Accepted Answer

When a minimum wage is set above the equilibrium wage, it results in a surplus of unskilled labor because the higher wage attracts more workers than employers are willing to hire at that wage, leading to unemployment among unskilled workers.

If the Minimum Wage Law Sets a Price Floor Above