Figure 20-1
-Refer to Figure 20-1. Based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur?
A) The unemployment rate will rise.
B) The unemployment rate will fall.
C) The level of unemployment will rise, but the percentage of the labor force unemployed will not change.
D) None of the above will occur.

Question

Figure 20-1 
-Refer to Figure 20-1. Based on the graph of the labor market above, if a minimum wage is set at $5 per hour, which of the following will occur?
A) The unemployment rate will rise. 
B) The unemployment rate will fall. 
C) The level of unemployment will rise, but the percentage of the labor force unemployed will not change. 
D) None of the above will occur.

Quizplus · Accepted Answer

If the minimum wage is set at $5 per hour and this rate is below the equilibrium wage in the labor market, it will not affect the unemployment rate or the level of unemployment.

Figure 20-1 -Refer to Figure 20-1. Based on the Graph of the Graph