Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The quantity of labor demanded will decrease due to higher costs for employers.
B
The quantity of labor demanded will increase because workers will be more motivated.
C
The quantity of labor demanded will remain unchanged as employers adjust to the wage.
D
The quantity of labor demanded will increase because more workers will enter the labor market.
Understanding the Answer
Let's break down why this is correct
Answer
When the minimum wage increases significantly, employers may find it more expensive to hire workers. This is because they have to pay higher salaries, which can lead them to reduce the number of employees they can afford to keep or hire. For example, if a restaurant has to pay its staff more, it might decide to cut back on the number of waiters it employs or reduce their hours. As a result, the quantity of labor demanded by employers in the market typically decreases when the minimum wage rises. This situation can lead to fewer job opportunities for people looking for work.
Detailed Explanation
When the minimum wage goes up, employers have to pay more for each worker. Other options are incorrect because Some might think that higher pay makes workers work harder; It's a common belief that wages don't change hiring.
Key Concepts
Labor Demand Dynamics
Market Equilibrium
Wage Elasticity
Topic
Labor Demand Dynamics
Difficulty
easy level question
Cognitive Level
understand
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