A Minimum Wage Law Set Above the Equilibrium Wage Rate

question 270

Multiple Choice

A minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

• A)does not apply to all workers.
• B)boosts the income of highly skilled workers.
• C)benefits only those workers who are able to find and keep a job.
• D)benefits nobody.
• E)cannot be enforced.

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Definitions:

Creates Shortage

A market condition where the quantity demanded exceeds the quantity supplied at a given price, often due to price controls like price ceilings.

Price Floor

A government-imposed minimum price level for a particular commodity or service, aimed at protecting producers.

Legal Minimum

A legally established lower threshold for payments or conditions, such as minimum wage.

Good Sold

Refers to a product that has been purchased by a buyer from a seller in a transaction.