-Refer to Exhibit 4-6.Suppose the minimum wage is set at $7.The result will be
A) a surplus of unskilled workers.
B) a shortage of unskilled workers.
C) no effect on the market for unskilled labor.
D) none of the above

Question

-Refer to Exhibit 4-6.Suppose the minimum wage is set at $7.The result will be
A) a surplus of unskilled workers. 
B) a shortage of unskilled workers. 
C) no effect on the market for unskilled labor. 
D) none of the above

Quizplus · Accepted Answer

When the minimum wage is set above the equilibrium wage, it results in a surplus of labor, meaning there are more workers willing to work at that wage than there are jobs available, leading to unemployment among unskilled workers.