Figure 4-16
-Refer to Figure 4-16. Some policymakers have argued that the government should establish a "living wage." A living wage would provide workers a reasonable standard of living in their city or region. If a living wage of $10 per hour is established in the market pictured here, we would expect
A) employment will increase to 14 million.
B) employment will decrease to 8 million.
C) the wage will actually rise to $20 per hour.
D) there will be a surplus of 14 million workers.

Question

Figure 4-16 
-Refer to Figure 4-16. Some policymakers have argued that the government should establish a "living wage." A living wage would provide workers a reasonable standard of living in their city or region. If a living wage of $10 per hour is established in the market pictured here, we would expect
A) employment will increase to 14 million. 
B) employment will decrease to 8 million. 
C) the wage will actually rise to $20 per hour. 
D) there will be a surplus of 14 million workers.

Quizplus · Accepted Answer

If a living wage of $10 per hour is established and it is above the equilibrium wage, it acts as a price floor, leading to a decrease in employment as employers hire fewer workers at the higher wage.

Figure 4-16 -Refer to Figure 4-16. Some Policymakers Have Argued That the Argued