-Refer to the above figure. A minimum wage has been set at WM. The amount of unemployment is
A) zero.
B) at Qe.
C) QS minus QD.
D) not computable from the information given.

Question

-Refer to the above figure. A minimum wage has been set at WM. The amount of unemployment is
A) zero. 
B) at Qe. 
C) QS minus QD. 
D) not computable from the information given.

Quizplus · Accepted Answer

The amount of unemployment is represented by the difference between the quantity of labor supplied (QS) and the quantity of labor demanded (QD) at the wage rate WM. This is because at the minimum wage WM, more people are willing to work (QS) than there are jobs available (QD), leading to unemployment.

-Refer to the Above Figure