An effective minimum wagea. imposes a price ceiling on the wages of various categories of low-skill workers. b. increases the demand for low-skill workers. c. makes it easier for low skill workers to find jobs. d. increases the earnings of some low-skill workers while reducing the employment and training opportunities available to others.

Question

Kaydence

Business

11 January, 10:03

An effective minimum wagea. imposes a price ceiling on the wages of various categories of low-skill workers. b. increases the demand for low-skill workers. c. makes it easier for low skill workers to find jobs. d. increases the earnings of some low-skill workers while reducing the employment and training opportunities available to others.

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Cedric Crawford · Answer 1

d. increases the earnings of some low-skill workers while reducing the employment and training opportunities available to others.

Explanation:

Minimum wage is a form of price floor. It is the lowest amount that should be paid to labour for their services rendered. It is usually set by the government or an agency of government.

Minimum wage causes supply of Labour to exceed demand for Labour. Firms would demand less of Labour because of higher cost of Labour. Decreased demand for Labour would increase unemployment.

Minimum wage isn't a price ceiling but a price floor.

Minimum wage increases the income of Labour.