Table 4-3

Table 4-3 shows the demand and supply schedules for labor market in the city of Pixley.
-Refer to Table 4-3.If a minimum wage of $9.50 is mandated there will be a
A) shortage of 20,000 units of labor.
B) surplus of 20,000 units of labor.
C) shortage of 40,000 units of labor.
D) surplus of 40,000 units of labor.

Question

Table 4-3
  
Table 4-3 shows the demand and supply schedules for labor market in the city of Pixley.
-Refer to Table 4-3.If a minimum wage of $9.50 is mandated there will be a
A) shortage of 20,000 units of labor. 
B) surplus of 20,000 units of labor. 
C) shortage of 40,000 units of labor. 
D) surplus of 40,000 units of labor.

Quizplus · Accepted Answer

A minimum wage set above the equilibrium wage will result in a surplus of labor, as more workers are willing to work at the higher wage than there are jobs available.

Table 4-3 Table 4-3 Shows the Demand and Supply Schedules for Labor