If a Minimum Wage Is Introduced That Is Above the Equilibrium

question 50

Multiple Choice

If a minimum wage is introduced that is above the equilibrium wage rate,

• A) the supply of labour increases and the supply of labour curve shifts rightward.
• B) job-search activity increases.
• C) unemployment decreases because more workers accept jobs at the higher minimum wage rate.
• D) the quantity of labour demanded increases.
• E) the quantity of labour supplied decreases because of the increase in unemployment.

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Definitions:

P(A|B)

P(A|B) represents the conditional probability of event A occurring given that event B has occurred, showing the likelihood of A when B is known to happen.

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