If workers demand a wage above the market-clearing wage, we observe
A) unemployment.
B) an excess supply of jobs.
C) a shortage of workers.
D) unions.
E) an excess demand for workers.

Question

Quizplus · Accepted Answer

When workers demand a wage above the market-clearing wage, employers will not be willing to hire as many workers, leading to unemployment. This is because the demand for labor decreases while the supply of labor increases, creating a surplus of workers who are willing to work at the higher wage but cannot find employment.

If Workers Demand a Wage Above the Market-Clearing Wage, We