-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?
A) when the market is at its equilibrium, with no minimum wage
B) when a minimum wage of $4 an hour is imposed
C) when a minimum wage of $6 an hour is imposed
D) when a minimum wage of $8 an hour is imposed
E) None of the above because the market will adjust so that there is no unemployment.

Question

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?
A) when the market is at its equilibrium, with no minimum wage 
B) when a minimum wage of $4 an hour is imposed 
C) when a minimum wage of $6 an hour is imposed 
D) when a minimum wage of $8 an hour is imposed 
E) None of the above because the market will adjust so that there is no unemployment.

Quizplus · Accepted Answer

Imposing a minimum wage of $8 an hour would create the largest amount of unemployment because it sets the wage above the equilibrium point, leading to a surplus of labor (more people are willing to work at this higher wage than there are jobs available).

-The Figure Above Shows the Labor Market in a Region