Macroeconomics cour

Question

If the minimum wage is higher than the prevailing market wage, it becomes a binding ___________________  (A)  . While many people want to work for a higher wage, fewer employers want to hire them, which creates a(n) ___________________ (B)  in laborers.

Answer 1

If the minimum wage is higher than the prevailing market wage, it becomes a binding _____________Price Floor______  (A)  . While many people want to work for a higher wage, fewer employers want to hire them, which creates a(n) __surplus_________________ (B)  in laborers.

A surplus in labor is an increase in unemployment .

Cheers,

Charles