Figure 9-2
-Refer to the Figure 9-2.If the minimum wage rose from $5 to $7,what would happen to unemployment?

Question

Figure 9-2 
-Refer to the Figure 9-2.If the minimum wage rose from $5 to $7,what would happen to unemployment?

Quizplus · Accepted Answer

According to the graph, at a minimum wage of $5, the equilibrium level of employment is 80. If the minimum wage is raised to $7, this would result in an increase in the wage rate above the market-clearing wage rate, leading to a decrease in employment. The difference in employment levels between a minimum wage of $7 and $5 is 40, therefore unemployment would rise by 40.

Figure 9-2 -Refer to the Figure 9-2.If the Minimum Wage Rose from Wage