Multiple Choice
Suppose a minimum wage of $4 an hour is in force, resulting in unemployment of 10 million hours. Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $5 per hour. What will happen to the equilibrium wage rate and employment?
A) The wage rate is $5 an hour and there will be no unemployment.
B) The wage rate is $5 an hour and there will be a surplus of labour.
C) The wage rate is $4 an hour and there will be a surplus of labour.
D) The wage rate is $4 an hour and there will be no unemployment.
E) The wage rate is $4 an hour and there will be unemployment.
Correct Answer:
Verified
Correct Answer:
Verified
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