Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It will decrease the quantity of labor demanded due to higher costs for employers.
B
It will increase the quantity of labor demanded as more workers will enter the market.
C
It will have no effect on the quantity of labor demanded regardless of wage levels.
D
It will cause employers to hire more workers at the same wage level.
Understanding the Answer
Let's break down why this is correct
Answer
When the minimum wage increases, it means that employers must pay their workers more money for the same amount of work. This can lead to a decrease in the quantity of labor demanded because some businesses might not be able to afford to hire as many workers at the higher wage. For example, if a small restaurant has to pay its servers $15 an hour instead of $10, it might decide to reduce the number of servers it employs, leading to fewer job opportunities. Additionally, some companies may automate certain tasks instead of hiring more workers, further decreasing demand for labor. Overall, while higher wages can benefit workers, they can also lead to fewer jobs being available in the market.
Detailed Explanation
When the minimum wage goes up, it costs employers more to hire workers. Other options are incorrect because Some might think that more workers will join the job market, so employers will hire more; It's a common belief that wages don't matter for hiring.
Key Concepts
Labor demand dynamics
Wage effects on employment
Minimum wage legislation
Topic
Labor Demand Dynamics
Difficulty
easy level question
Cognitive Level
understand
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