Question

If the demand for labor is reflected in a downward sloping linear demand curve, then successive increases in any binding minimum wage (that is, for example, a binding minimum wage increases from $10.10/hr to $12.10/hr and then from $12.10/hr to $14.10/hr), will result in

Multiple Choice
no job losses since the demand for labor, particularly unskilled labor, is highly price inelastic.   
increasing (as a percentage) job losses, and decreasing total income (or reduced rates of income growth) paid to labor

fewer (as a percentage) job losses, and increasing total income paid to labor.

the same job losses and the total income paid to labor will not change because the price elasticity of demand along a linear demand curve does not change.

Answer 1

The answer is B -) increasing (as a percentage) job losses, and decreasing total income (or reduced rates of income growth) paid to labor.

since when the binding minimu wage increase from $10,10/hr to $12.10/hr and then $12.10/hr to $14.10/hr, it will result in decrease in quantity demand for labor and increased the quantity supplied of labor but the quantity demand is less , therefore the unemployment will increase or the job losses will increase and total income decreases.