Question

Which of the items below would likely cause wage levels to be above labor market equilibrium levels? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. An increased demand for agricultural exports causes GDP to increase. unanswered Workers for a large national retailer become unionized. unanswered A large employer in the region significantly increases its wage rates to reduce the turnover of its workers. unanswered A large city decides to raise the municipal minimum wage to $10 per hour although employers are currently paying $10.50 per hour for unskilled labor. unanswered A hurricane causes major damage along the Gulf Coast and there is a shortage of construction workers to repair the damage.

Answer 1

Which of the items below would likely cause wage levels to be above labor market equilibrium levels?

Answers : An increased demand for agricultural exports causes GDP to increase. ( This will raise equilibrium wage level )

Workers for a large national retailer become unionized. ( CORRECT ) ( Unionization causes market equilibrium distrotion )

A large employer in the region significantly increases its wage rates to reduce the turnover of its workers. (CORRECT) (This causes wage imbalance)

A large city decides to raise the municipal minimum wage to $10 per hour although employers are currently paying $10.50 per hour for unskilled labor. ( The wage rate remains at equilibrium )

A hurricane causes major damage along the Gulf Coast and there is a shortage of construction workers to repair the damage.( This increases equilibrium wage due to labor shortage )