Asked by Grace Thomas on May 30, 2024
Verified
If the legal minimum wage is set below the equilibrium wage rate
A) employment will tend to be lower than it otherwise would have been.
B) employment will tend to be higher than it otherwise would have been.
C) the level of employment will not be affected.
D) there is no way to determine how the level of government would be affecteD.
Legal Minimum Wage
The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay their workers.
Equilibrium Wage Rate
The wage rate at which the quantity of labor demanded equals the quantity of labor supplied.
- Acquire knowledge about the impact of laws governing minimum wages on the labor market.
Verified Answer
MR
Marco Ruiz TrellesJun 02, 2024
Final Answer :
C
Explanation :
When the legal minimum wage is set below the equilibrium wage rate, it does not directly affect employment levels because employers would naturally pay the equilibrium wage or higher. The minimum wage in this scenario does not act as a binding constraint on wages.
Learning Objectives
- Acquire knowledge about the impact of laws governing minimum wages on the labor market.