Question

One effect of a minimum wage in the market for low-skilled labor is a a. surplus of low-skilled labor.

b. an increase in demand for low-skilled labor.
c. no effect in the market for low-skilled labor.
d. a shortage of low-skilled labor.

Answer 1

a a. surplus of low-skilled labor.

Step-by-step explanation:

Minimum wage is a form of price floor. A price floor is the minimum price that a good or service can be bought.

Price floors (minimum wage ) is usually set above equilibrium price. This increases the supply of labour but decreases the demand for Labour. As a result , there would be a surplus of low skilled labour.

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