Scenario 14.1
A worker in Firm A earns an income of $5,000 per month. He has been offered a job in Firm B where he will be paid a salary of $7,000 per month.
-If the government sets a minimum wage which is more than the equilibrium wage, the firms tend to demand more labor.

Question

Quizplus · Accepted Answer

The scenario does not provide any information about the government setting a minimum wage higher than the equilibrium wage. Therefore, it is not possible to determine if firms would demand more labor in such a situation.

Scenario 14.1 A Worker in Firm a Earns an Income of $5,000