-The Above Figure Shows the Labor Market in an Undeveloped

Multiple Choice

-The above figure shows the labor market in an undeveloped nation. If the minimum wage is set at $5.00 per hour, what effect will it have on the market for low-skilled labor?

A) The minimum wage will have no effect when set above the equilibrium wage rate.
B) The minimum wage will create a surplus of low-skilled labor.
C) The minimum wage will create a shortage of low-skilled labor.
D) The minimum wage will attract more labor to the low-skilled labor market and cause the wage rate to fall.