If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor, _____.
A)the quantity of unskilled labor demanded will exceed the quantity of unskilled labor supplied
B)the quantity of unskilled labor supplied will equal the quantity of unskilled labor demanded
C)the quantity of unskilled labor supplied will exceed the quantity of unskilled labor demanded
D)there will be excess supply of skilled labor
E)there will be excess demand for skilled labor

Question

If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor, _____.​
A)the quantity of unskilled labor demanded will exceed the quantity of unskilled labor supplied
B)the quantity of unskilled labor supplied will equal the quantity of unskilled labor demanded
C)the quantity of unskilled labor supplied will exceed the quantity of unskilled labor demanded
D)there will be excess supply of skilled labor
E)there will be excess demand for skilled labor

Quizplus · Accepted Answer

A price floor above the equilibrium price of unskilled labor will create an excess supply of unskilled labor, as the quantity of labor supplied will exceed the quantity of labor demanded. Therefore, option C is the correct answer. The other options are not relevant to the impact of a minimum wage law on the labor market.

If a Minimum Wage Law Is Passed Imposing a Price