Use the following table to answer the following questions.

-If a minimum wage is established at $7.50,what would be the amount of disequilibrium in the labor market?
A) There would be a shortage of labor of 20,170,000.
B) There would be a surplus of labor of 20,170,000.
C) There would be neither a shortage nor a surplus.
D) A labor shortage of 20,170,000 would be eliminated because individuals would decide to work in the illegal black market.
E) A labor shortage of 20,170,000 would increase as individuals find work in the illegal black market.

Question

Use the following table to answer the following questions.
 
-If a minimum wage is established at $7.50,what would be the amount of disequilibrium in the labor market?
A) There would be a shortage of labor of 20,170,000. 
B) There would be a surplus of labor of 20,170,000. 
C) There would be neither a shortage nor a surplus. 
D) A labor shortage of 20,170,000 would be eliminated because individuals would decide to work in the illegal black market. 
E) A labor shortage of 20,170,000 would increase as individuals find work in the illegal black market.

Quizplus · Accepted Answer

According to the table, at a minimum wage of $7.50, the quantity of labor supplied is 142,170,000, while the quantity of labor demanded is 122,000,000. This means there is a surplus of labor in the market, which is equal to the difference between the quantity supplied and the quantity demanded, or 20,170,000. Therefore, the correct answer is B, there would be a surplus of labor of 20,170,000.

Use the Following Table to Answer the Following Questions