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NEW QUESTION: 1
In a competitive labor market, a minimum wage that is set above the equilibrium wage will result in which
of the following:
A. All of the above.
B. A decrease in the quantity demanded of labor.
C. An increase in the quantity supplied of labor.
D. A decrease in total employment.
Answer: A
Explanation:
Choice "d" is correct. As illustrated in the graph, a minimum wage that is set above the equilibrium wage
results in a decrease in the quantity demanded of labor (falls to LD), an increase in the quantity supplied
of labor (increases to LS), and a decrease in total employment (total employment falls from L* to LD).
Choices "a", "b", and "c" are incorrect. All are true, making choice "d" the only right answer.
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NEW QUESTION: 3
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