A Binding Minimum Wage Established by the Government

Multiple Choice

A binding minimum wage established by the government

A) will be effective only if the minimum wage is set below the free- market equilibrium wage.
B) is a price floor that will create a surplus of workers if the labour market is competitive.
C) is essentially a price ceiling that creates a shortage of workers.
D) will affect adversely only those workers whose value of productivity is greater than this minimum wage.
E) will have no effect on the quantity of labour employed.