A minimum wage law
A) lowers the wage rate of workers who are able to get a job.
B) increases employment.
C) increases the time spent searching by workers who cannot find a job.
D) creates efficiency in the labor market.
E) must be set below the equilibrium wage rate in order to have an impact.

Question

Quizplus · Accepted Answer

A minimum wage law can lead to an increase in unemployment as it increases the cost of hiring workers, making it difficult for employers to hire more workers. Workers who cannot find a job will spend more time searching for jobs, thus increasing the time spent searching, which is not ideal. Thus, option C is the correct choice.

A Minimum Wage Law