Figure 19-5
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the quantity demanded of labor if a minimum wage of $8 per hour is imposed on this market?
A)100
B)200
C)300
D)400

Question

Figure 19-5 
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the quantity demanded of labor if a minimum wage of $8 per hour is imposed on this market?
A)100 
B)200 
C)300 
D)400

Quizplus · Accepted Answer

At a minimum wage of $8 per hour, the demand for labor reduces to Qd1 = 100, which is the point where the demand curve intersects with the minimum wage line. At this quantity, the wage rate is $8 and there is a surplus of labor, indicating that there will be unemployment or underemployment in the market.

Figure 19-5 -Refer to Figure 19-5. Given Demand for Labor, D1, and Labor