To be effective in raising people's wages,a minimum wage must be set

Question

Quizplus · Accepted Answer

Setting the minimum wage above the equilibrium wage rate would create a price floor on wages, which would create a shortage of labor, pushing up the wage rate for workers. A minimum wage set below the equilibrium wage rate would have no impact on wages. A minimum wage set at the equilibrium wage rate would have no effect on wages either. Setting a minimum wage below $7 would not be effective in raising people's wages, as it is below the current federal minimum wage. The option E is not valid, as the direction of the shift in the supply curve depends on various factors and cannot be predicted with certainty.

To Be Effective in Raising People's Wages,a Minimum Wage Must