Question

Use the blue point (circle symbol) to indicate the quantity of labor demanded, and use the orange point (square symbol) to indicate the quantity of labor supplied in this case. ? Supply Demand Initial Labor Demanded Initial Labor Supplied Minimum Wage New Labor Demanded New Labor Supplied Quantity of Labor Suppose there is an increase in the minimum wage. On the previous graph, shift the black line labeled "Minimum Wage" to show the effect this has on the wage paid to workers. Then use the green point (triangle symbol) to indicate the new quantity of labor demanded, and use the purple point (diamond symbol) to indicate the new quantity of labor supplied given this increase in the minimum wage. True or False: The amount of unemployment in this industry falls as a result of the increase in the minimum wage. O True O False Wage Minimum Wage +

Answer 1

The amount of unemployment in this industry falls as a result of the increase in the minimum wage. O True O False Wage Minimum Wage + is True. The amount of unemployment in this industry falls as a result of the increase in the minimum wage. The correct answer is true.

Step-by-step explanation:

Initial Labor Market: The blue circle represents the initial quantity of labor demanded, and the orange square represents the initial quantity of labor supplied.

Minimum Wage Impact: As the minimum wage increases, the black line labeled "Minimum Wage" shifts. This causes a new equilibrium point to be established.

New Equilibrium: The green triangle indicates the new quantity of labor demanded, and the purple diamond indicates the new quantity of labor supplied.

Unemployment Reduction: In this scenario, the increase in the minimum wage leads to a situation where the quantity of labor demanded is higher than the quantity of labor supplied at the new equilibrium. This results in a reduction in unemployment in the industry.

When the minimum wage rises, employers are willing to hire more workers at the higher wage rate, while more workers are willing to supply their labor. This increased alignment between labor demand and supply reduces unemployment in the industry. The correct answer is true.

Answer 2

False. Typically, an increase in the minimum wage can lead to a decrease in employment opportunities within an industry.

How to explain

When the minimum wage rises, businesses may face increased labor costs, potentially leading to adjustments such as reducing staff numbers, cutting work hours, or automation.

This situation might result in higher unemployment rates as companies try to manage their expenses within the new wage framework.

While the intent of raising the minimum wage is to improve earnings for low-wage workers, its impact on unemployment remains a topic of debate among economists, as it could potentially hinder job creation or reduce job availability, especially in certain industries.

Hence, the shift in the image that shows the quantity of labor demanded and the quantity of labor supplied based on the minimum wage indicates that an increase in the minimum wage can lead to a decrease in employment opportunities within an industry.