A minimum wage law tends to ?
Correct answer: D. Create more unemployment in low-skill job markets than in high-skill job markets
- A. Help all teenagers because they receive a higher wage than they would otherwise
- B. have no impact on unemployment as long as it is set above the competitive equilibrium wage
- C. Create more Unemployment is high-skill job markets than in low-skill job markets
- D. Create more unemployment in low-skill job markets than in high-skill job markets
Explanation
Minimum-wage workers are concentrated in low-skill labour markets, where a binding wage floor commonly creates a larger employment surplus. It therefore tends to produce more unemployment in low-skill than in high-skill markets.
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