Suppose the current equilibrium real wage is $15 an hour.Which of the following is true?
A) A real wage above $15 an hour would lead to an excess demand for labor
B) A real wage above $15 an hour would lead to an excess supply of labor
C) The real wage must fall to prevent unemployment
D) The real wage must rise to prevent unemployment
E) A real wage below $15 an hour would lead to an excess supply of labor

Question

Quizplus · Accepted Answer

A real wage above the equilibrium wage of $15 an hour would lead to an excess supply of labor because more workers would be willing to work at the higher wage, but employers would demand less labor, resulting in unemployment.

Suppose the Current Equilibrium Real Wage Is $15 an Hour