A minimum wage rate that is set ________ the equilibrium real wage rate creates a ________ of labor.

Question

Quizplus · Accepted Answer

When the minimum wage rate is set above the equilibrium real wage rate, it creates a surplus of labor. This means that there are more workers willing to work at the minimum wage level than there are jobs available at that wage rate. This creates a situation where employers have a larger pool of workers to choose from and may lead to a decrease in job opportunities for low-skilled workers.

A Minimum Wage Rate That Is Set ________ the Equilibrium