Minimum wages create unemployment in markets where they create a

a. shortage of labor. unemployment of this type is called structural.

b. surplus of labor. unemployment of this type is called structural.

c. surplus of labor. unemployment of this type is called frictional.

d. shortage of labor. unemployment of this type is called frictional.

Question

Business

Essence Drake

1 January, 10:55

Minimum wages create unemployment in markets where they create a

a. shortage of labor. unemployment of this type is called structural.

b. surplus of labor. unemployment of this type is called structural.

c. surplus of labor. unemployment of this type is called frictional.

d. shortage of labor. unemployment of this type is called frictional.

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Christopher Ford · Answer 1

B. Minimum wages can cause a surplus of labor and this type of employment is referred to as structural. The best way to think about this is that the "structure" of the economy is the cause of the surplus of labor because a increased minimum wage can entice more people to join the labor market.