Graphically show the effects of an effective minimum wage on the number of unemployed in the market for unskilled labor.

The minimum wage causes (A SURPLUS/NO CHANGE/ A SHORTAGE) in the markst. This means that with a minimum wage unemployment (RISES/FALLS/STAYS THE SAME). Without the minimum wage, workers are earning (P1/P2/Pe). Without the minimum wage, workers would have earned (P2/P1/Pe).

 

Transcribed Image Text:

Wage (per hour) P₁ Pe P2 Unskilled Labor Market Quantity of workers S D Wage (per hour) P₁ Pe P2 Unskilled Labor Market Quantity of workers S D

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If the minimum wage is set above the equilibrium wage rate the quantity of labor supplied by workers ... View the full answer