Figure 9-1
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?
A)The quantity of labor demanded by firms will rise.
B)The quantity of labor demanded by firms will fall.
C)The unemployment rate will fall.
D)Both A and C will occur.

Question

Figure 9-1 
-Refer to Figure 9-1.Based on the graph of the labor market above,if a minimum wage of $8 per hour is imposed,which of the following will result?
A)The quantity of labor demanded by firms will rise. 
B)The quantity of labor demanded by firms will fall. 
C)The unemployment rate will fall. 
D)Both A and C will occur.

Quizplus · Accepted Answer

Based on the graph, a minimum wage of $8 per hour will increase the wage rate above the equilibrium level, leading to a surplus of labor (unemployment) as the quantity of labor supplied exceeds the quantity of labor demanded. Therefore, the quantity of labor demanded by firms will fall. The unemployment rate will increase, rather than fall, due to the surplus of labor. Option A is incorrect. Option C is incorrect as well since the unemployment rate will increase. Option D is incorrect as it contradicts the graph's implications.

Figure 9-1 -Refer to Figure 9-1.Based on the Graph of the Labor