Which of the following statements is true of minimum wages?

Question

Quizplus · Accepted Answer

Minimum wages are typically set above the labor market-clearing wage rate, which is the rate at which the quantity of labor supplied equals the quantity of labor demanded. This creates a surplus of labor or unemployment, as the quantity of labor supplied exceeds the quantity demanded at the minimum wage. This can lead to higher costs for firms and producers, and may not necessarily benefit them. Minimum wages are sometimes referred to as wage floors, not ceilings. Finally, all states in the United States have a minimum wage law, although the actual minimum wage rate may vary by state.

Which of the Following Statements Is True of Minimum Wages