Figure 13-1

-Refer to Figure 13-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?
A) The quantity of labor demanded by firms will rise.
B) The quantity of labor demanded by firms will fall.
C) The unemployment rate will fall.
D) Both A and C will occur.

Question

Figure 13-1
 
-Refer to Figure 13-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?
A) The quantity of labor demanded by firms will rise. 
B) The quantity of labor demanded by firms will fall. 
C) The unemployment rate will fall. 
D) Both A and C will occur.

Quizplus · Accepted Answer

According to the graph, when the minimum wage is imposed, the wage rate increases from $7 to $8, causing the quantity of labor demanded by firms to fall from 820 to 780. This means that choice B is correct since the quantity of labor demanded will fall. Choice A is incorrect since the graph shows a decrease in quantity demanded, not an increase. Choice C is also incorrect since an increase in the minimum wage could potentially lead to structural unemployment and an increase in the unemployment rate. Therefore, only choice B is the best answer.

Figure 13-1 -Refer to Figure 13-1.Based on the Graph of the Labor