-According to the above figure, if the government imposes a minimum wage equal to Wm, the effect will be
A)a reduction in employment from Qₑ to Qm.
B)an increase in employment from Qₑ to Qm.
C)a decrease in labor supplied, from C to E.
D)an increase in labor supplied, from A to E.

Question

-According to the above figure, if the government imposes a minimum wage equal to Wm, the effect will be
A)a reduction in employment from Qₑ to Qm. 
B)an increase in employment from Qₑ to Qm. 
C)a decrease in labor supplied, from C to E. 
D)an increase in labor supplied, from A to E.

Quizplus · Accepted Answer

A minimum wage set above the equilibrium wage (Wm > We) leads to a surplus of labor, causing a reduction in employment from the equilibrium quantity (Qₑ) to a lower quantity (Qm) where the demand for labor is less.

-According to the Above Figure, If the Government Imposes a Minimum