If the Minimum Wage Is Set Above the Equilibrium Market

question 81

Multiple Choice

If the minimum wage is set above the equilibrium market wage, it:

• A) increases unemployment.
• B) is effective and reduces unemployment.
• C) equals the black market wage.
• D) is lower than firms are willing to pay for labor.
• E) does not affect the market equilibrium.

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Definitions:

Single Individual

Refers to one person acting in a capacity, either personally or legally, without partnership or company.

Business

An organization involved in the trade of goods, services, or both to consumers.

Capital Deficits

Refers to a situation where a company's liabilities exceed its assets, indicating financial weakness or distress.

Noncash Assets

Assets that cannot be easily converted into cash, such as property, plant, and equipment.