Table 4-8
Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8. If a minimum wage of $10.00 is mandated there will be a
A) shortage of 20,000 units of labor.
B) surplus of 20,000 units of labor.
C) shortage of 40,000 units of labor.
D) surplus of 40,000 units of labor.

Question

Table 4-8
  Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8. If a minimum wage of $10.00 is mandated there will be a
A) shortage of 20,000 units of labor. 
B) surplus of 20,000 units of labor. 
C) shortage of 40,000 units of labor. 
D) surplus of 40,000 units of labor.

Quizplus · Accepted Answer

A minimum wage set above the equilibrium wage creates a surplus of labor, as more workers are willing to work at the higher wage than there are jobs available, leading to unemployment.

Table 4-8 Table 4-8 Shows the Demand and Supply Schedules