The minimum wage law is an example of a
A) price floor.
B) price ceiling.
C) law that requires quantity demanded to equal quantity supplied.
D) law that allows individual employers and employees to make free decisions.
E) law that sets the minimum number of hours that an employee must work for wages during the week.

Question

Quizplus · Accepted Answer

The minimum wage law is an example of a price floor, which is a legal minimum price set above the equilibrium price for a good or service. In this case, the minimum wage sets a floor below which employers cannot pay their workers. By setting a price floor, the government aims to increase the wage rate for workers and prevent exploitation, but it can also cause unintended consequences such as unemployment and price distortions.

The Minimum Wage Law Is an Example of a