(Figure: Kenyan Labor Market) The government of Kenya implements a minimum wage of 15,000 Kenyan shillings per month. What occurs in this labor market after the implementation of the minimum wage?

Question

Quizplus · Accepted Answer

After the implementation of a minimum wage, the wage rate increases from W0 to W1. This results in an increase in the quantity of labor supplied from Q0 to Q2, and a decrease in the quantity of labor demanded from Q0 to Q1. The difference between the quantity of labor supplied and the quantity of labor demanded is a surplus of workers equal to Q2 - Q1, which is 15,000 in this case. Therefore, the correct answer is C) a surplus of 15,000 workers.

(Figure: Kenyan Labor Market) the Government of Kenya Implements a Minimum