If a Minimum Wage Is Introduced That Is Above the Equilibrium

question 218

Multiple Choice

If a minimum wage is introduced that is above the equilibrium wage rate,

• A) the quantity of labor demanded increases.
• B) job search activity increases.
• C) the supply of labor increases and the supply of labor curve shifts rightward.
• D) unemployment decreases because more workers accept jobs at the higher minimum wage rate.
• E) the quantity of labor supplied decreases because of the increase in unemployment.

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Definitions:

Price

The expenditure required to procure a good, service, or asset.

Income

The amount of money received by an individual or entity over a specified period, usually through employment, business, or investments.

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded by consumers.

Income

Financial gains accrued from work or investments over time.