Which of the following statements are true? Check all that apply.

In this labor market, a minimum wage of $7.50 is binding.

If the minimum wage is set at $10.50, the market will not reach equilibrium.

In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Binding minimum wages cause frictional unemployment.

Question

Social Studies

Tanner Hood

17 May, 12:17

Which of the following statements are true? Check all that apply.

In this labor market, a minimum wage of $7.50 is binding.

If the minimum wage is set at $10.50, the market will not reach equilibrium.

In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Binding minimum wages cause frictional unemployment.

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Answers (1)

Know the Answer?

Justice Huffman · Answer 1

Suppose a bill is passed to make minimum hourly wage as $7.50, the implications would be that:

-If the minimum wage is set at $10.50, the market will not reach equilibrium.

-In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Therefore only the two above listed statements would be TRUE.