Minimumwage laws and unemployment
Minimumwage laws and unemployment
Consider the labor market defined by the supply and demand curves plotted on the
following graph.
Use the calculator to help you answer the following questions. You will not be graded on
any changes you make to the calculator.
Graph Input Tool
Suppose the federal government contemplates a new law that would create a
national minimum wage of $ per hour.
Which of the following statements are true? Check all that apply.
In this labor market, a minimum wage of $ would be binding.
In the absence of price controls, a surplus puts upward pressure on wages until
they rise to the equilibrium.
Binding minimum wages increase the natural rate of unemployment.
If the minimum wage were set at $ the market would still be able to reach
equilibrium.Consider the labor market defined by the supply and demand curves plotted on the following graph.
