Question

Assume the minimum wage exceeds the market-clearing wage. If there is an increase in the labor supply, then the number of workers who are unemployed will ______ and the number of workers who are employed will _______.

Answer 1

Increase; not change

Step-by-step explanation:

If the minimum wages tend to exceed the market clearing wages which is the wages in which the supply of labour equal to the demand for labour the labour supply will increased and the numbers of unemployed workers will definitely INCREASED while the number of the already employed workers will NOT CHANGE it will remain the same because the supply of labour did not equal the demand for labour since the minimum wages has exceeded the market clearing wages.

The numbers of supply has increased leading to the numbers of unemployed workers to increased because their is supply but no demand.

Therefore increased in supply of labour = increased in unemployed workers.