-Refer to the above figure. Suppose the government imposes a minimum wage rate of $20.00 per hour. This will likely result in
A) a surplus of labor.
B) a shortage of labor.
C) an equilibrium in the labor market.
D) an increase in the demand for labor.

Question

-Refer to the above figure. Suppose the government imposes a minimum wage rate of $20.00 per hour. This will likely result in
A) a surplus of labor. 
B) a shortage of labor. 
C) an equilibrium in the labor market. 
D) an increase in the demand for labor.

Quizplus · Accepted Answer

Imposing a minimum wage of $20.00 per hour sets the wage above the equilibrium level, leading to a surplus of labor because the quantity of labor supplied exceeds the quantity of labor demanded at this wage rate.

-Refer to the Above Figure