Use the following table to answer the next five questions.

-If a minimum wage is established at $7.50,determine the amount of disequilibrium in the labor market.
A) There would be a shortage of labor of 20,170,000.
B) There would be a surplus of labor of 20,170,000.
C) There would be neither a shortage nor a surplus.
D) A labor shortage of 20,170,000 would be eliminated because individuals would decide to work in the illegal black market.
E) A labor shortage of 20,170,000 would increase as individuals find work in the illegal black market.

Question

Use the following table to answer the next five questions.
 
-If a minimum wage is established at $7.50,determine the amount of disequilibrium in the labor market.
A) There would be a shortage of labor of 20,170,000. 
B) There would be a surplus of labor of 20,170,000. 
C) There would be neither a shortage nor a surplus. 
D) A labor shortage of 20,170,000 would be eliminated because individuals would decide to work in the illegal black market. 
E) A labor shortage of 20,170,000 would increase as individuals find work in the illegal black market.

Quizplus · Accepted Answer

According to the table, the quantity supplied of labor at the wage rate of $7.50 is 79,830,000 while the quantity demanded is 59,660,000. This means there is a surplus of labor of 20,170,000, which indicates that quantity supplied is greater than quantity demanded, resulting in disequilibrium in the labor market.

Use the Following Table to Answer the Next Five Questions