Refer to Figure 10-1. If unemployment is 2000 workers, then the minimum wage must be
A) $4.
B) $5.
C) $7.
D) $8.

Question

Quizplus · Accepted Answer

According to the graph, when unemployment is at 2000 workers, the minimum wage should be around $7. This is where the labor supply and labor demand curves intersect, creating an equilibrium in the market. Any lower minimum wage would result in more demand for labor than the supply, leading to a shortage of workers, while any higher minimum wage would create a surplus of workers in the market.