An increase in the minimum wage, which is above the equilibrium wage, will result in
A) firms hiring less workers
B) more people going to look for a job
C) adverse affects on low-skilled workers
D) more teenagers looking for jobs
E) All of these.

Question

Quizplus · Accepted Answer

An increase in the minimum wage will make it more expensive for firms to hire workers, so they will hire fewer workers. This will discourage some people from looking for a job or could cause them to lose their jobs. As a result, low-skilled workers, who are most likely to earn the minimum wage, will experience adverse effects. Finally, more teenagers may enter the job market to try to find work with increased wages. Therefore, all of the given options are correct.

An Increase in the Minimum Wage, Which Is Above the Equilibrium