If the Minimum Wage Exceeds the Equilibrium Wage,then

question 3

Multiple Choice

If the minimum wage exceeds the equilibrium wage,then

• A)the quantity demanded of labor will exceed the quantity supplied.
• B)the quantity supplied of labor will exceed the quantity demanded.
• C)the minimum wage will not be binding.
• D)there will be no unemployment.

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Definitions:

Unit Elastic

A situation in economics where a change in the price of a good or service results in a proportional change in the quantity demanded or supplied.

Very Inelastic

Describes a situation where the demand or supply for a good or service is minimally responsive to changes in price.

Very Elastic

Refers to a situation in which the demand or supply for a product changes significantly in response to price changes, indicating high sensitivity.

Elastic Demand Curve

A demand curve characterized by a high sensitivity of quantity demanded to changes in price, indicating that a small price change results in a large change in quantity demanded.