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Figure: The Effect of a Minimum Wage
-(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose that after some time with a minimum wage of W_F, the government abolishes the minimum wage. Employment will:

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Use the following to answer questions :
Figure: The Effect of a Minimum Wage

-(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose that after some time with a minimum wage of W_F, the government abolishes the minimum wage. Employment will:

Quizplus · Accepted Answer

When the government abolishes the minimum wage, the wage rate decreases to the market equilibrium wage rate and the number of employed workers increases to Q_E. This is because more firms are now willing to hire workers at the lower wage rate, leading to an increase in employment.

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