If the government were to intervene and set a wage for unskilled labor above the market wage,then we would expect,relative to the market outcome,
A)an increase in the number of unskilled jobs available.
B)a decrease in the number of unskilled jobs available.
C)a decrease in the number of workers wanting unskilled jobs.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

When the government intervenes and sets a wage above the market wage, this creates a minimum wage law. Employers are now required to pay workers at the government-mandated wage rate, which is higher than the market-clearing wage. This means that employers are less willing to hire as many workers as before because the higher wage rate makes the cost of labor more expensive. Therefore, there will likely be a decrease in the number of unskilled jobs available.

If the Government Were to Intervene and Set a Wage