Exhibit 4-6

Refer to Exhibit 4-6. Suppose the minimum wage is set at $7. The result will be
A)a surplus of unskilled workers.
B)a shortage of unskilled workers.
C)no effect on the market for unskilled labor.
D)a change in the equilibrium wage rate.

Question

Exhibit 4-6

Refer to Exhibit 4-6. Suppose the minimum wage is set at $7. The result will be
A)a surplus of unskilled workers. 
B)a shortage of unskilled workers. 
C)no effect on the market for unskilled labor. 
D)a change in the equilibrium wage rate.

Quizplus · Accepted Answer

At a minimum wage of $7, the wage rate is above the equilibrium wage rate ($5), which means there will be a surplus of unskilled workers. Employers will not want to hire as many workers at the higher wage rate, and there will be more job seekers than available jobs.

Exhibit 4-6 Refer to Exhibit 4-6. Suppose the Minimum Wage Is Set