-The above figure shows a labour market with a minimum wage of $8 an hour. How many people are employed when the minimum wage is in place?
A) 40,000
B) 80,000
C) 60,000
D) Fewer than 40,000
E) More than 80,000

Question

-The above figure shows a labour market with a minimum wage of $8 an hour. How many people are employed when the minimum wage is in place?
A) 40,000 
B) 80,000 
C) 60,000 
D) Fewer than 40,000 
E) More than 80,000

Quizplus · Accepted Answer

When a minimum wage of $8 is set above the equilibrium wage, the quantity of labor demanded by employers is less than the quantity of labor supplied by workers. The number of people employed is determined by the quantity of labor demanded at that wage, which is represented by the point on the demand curve directly below the minimum wage line. If the graph indicates that 40,000 people are employed at the $8 minimum wage, then that is the correct answer.

-The Above Figure Shows a Labour Market with a Minimum