In a Labor Market Characterized by a Downward-Sloping Demand Curve

question 23

Multiple Choice

In a labor market characterized by a downward-sloping demand curve and an upward-rising supply curve,the disemployment effect of a minimum wage does not equal the total unemployment caused by the minimum wage.Which of the following can explain this difference?

• A)The demand for unskilled labor increases with an increase in the wage rate
• B)At a higher wage,more people may enter the job market
• C)The demand for skilled labor increases with an increase in the wage rate
• D)At a higher wage,the supply of labor becomes inelastic

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