Question

In: Economics

Using the diagram above, suppose the minimum wage was increased to $15 an hour. The results...

Using the diagram above, suppose the minimum wage was increased to $15 an hour. The results would be:

Group of answer choices

18.3 million people would be employed

1.3 million workers would lose their jobs

a shortage of 3 million workers

A surplus of 1.7 million workers

Solutions

Expert Solution

Answer: 1.3 million workers would lose their jobs

As the minimum wage increases, the unemplyment rate rises as there will be less demand for workers. Therefore in the graph,The old equilibirum - New Demand should be equal to 1.3 million.

Since I don't have the graph here, If the above answer isn't correct the only other posibility can be a surplus of 1.7 million workers. If the above stats don't add up then if New Supply - New Demand is equal to 1.7 million then that is the answer.

The other two options are ruled out as an increase in minimum wage cannot lead to a shortage or increase employment.

Note: Just cross check the above two options on the graph.

Rahul Sunny answered 2 years ago
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