Suppose That the Equilibrium Wage in the Low-Skilled Labor Market

question 194

Multiple Choice

Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15. The government's action of increasing the minimum wage will result in

• A) a decrease in unemployment.
• B) an increase in unemployment.
• C) a shortage of low-skilled labor.
• D) neither a shortage nor a surplus of labor in the low-skilled labor market.

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