Question: Lets assume that the minimum wage in a certain area is $7.00 and let's assume that the lowest wage that businesses pay workers in this

Lets assume that the minimum wage in a certain area is $7.00 and let's assume that the lowest wage that businesses pay workers in this free market is $9.00 (assume that this is the going market wage that all businesses pay for unskilled, minimum wage workers). Given these conditions, and assuming no other changes in the economy, what does the theory of demand and supply predicts regarding what will happen to unemployment if the minimum wage is raised from $7.00 to $10.00?

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