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If a Minimum Wage Law Is Passed Imposing a Price

question 174

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If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would ___ structural unemployment and ____ the natural rate of unemployment:


Definitions:

Mass Transit

Public transportation systems designed to move large numbers of people efficiently via buses, trains, subways, and other modes of transport.

Price Elasticity

A gauge of the responsiveness of the quantity of a good supplied or sought after to fluctuations in its price.

Equilibrium Point

A state in a market where the supply of goods matches demand, resulting in stable prices and quantities.

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