Opponents of the minimum wage law implicitly assume that the _____ if they worry about the unemployment effects of the policy.
A)Supply curve for unskilled workers is inelastic
B)Supply curve for unskilled workers is highly elastic
C)Demand curve for unskilled workers is inelastic
D)Demand curve for unskilled workers is highly elastic

Question

Quizplus · Accepted Answer

Opponents of the minimum wage law worry about unemployment effects, which suggest that they believe the demand for unskilled workers is highly elastic, i.e. sensitive to changes in wages. A highly elastic demand curve means that a small increase in the wage rate could lead to a significant decrease in the quantity of labor demanded, resulting in unemployment. Thus, the assumption is that if the minimum wage is increased, firms will reduce their demand for low-skill workers, leading to job losses.

Opponents of the Minimum Wage Law Implicitly Assume That the _____