If the government imposes a minimum wage which is lower than the equilibrium wage rate in the market then this would have the following effect: A) The market will not clear and quantity of labour supplied will be greater than the quantity of labour demanded. B) The market will not clear and quantity of labour supplied will be smaller than the quantity of labour demanded. C) The market may or may not clear – more information is needed before predictions can be made. D) The market will clear and the quantity of labour demanded will be equal to the quantity of labour supplied.

If the government imposes a minimum wage which is lower than the equilibrium wage rate in the market then this would have the following effect: A) The market will not clear and quantity of labour supplied will be greater than the quantity of labour demanded. B) The market will not clear and quantity of labour supplied will be smaller than the quantity of labour demanded. C) The market may or may not clear – more information is needed before predictions can be made. D) The market will clear and the quantity of labour demanded will be equal to the quantity of labour supplied.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 11P

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