If we assume that the current equilibrium wage for low-skilled labor is $8 per hour and the minimum wage is increased from $5.75 to $7.25 per hour, then
A) unemployment among low-skilled workers will increase.
B) unemployment among low-skilled workers will remain unaffected.
C) unemployment among low-skilled workers will decrease.

Question

Quizplus · Accepted Answer

Since the new minimum wage of $7.25 is still below the equilibrium wage of $8, it will not affect the labor market, and unemployment among low-skilled workers will remain unaffected.

If We Assume That the Current Equilibrium Wage for Low-Skilled