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22 November, 07:15

A minimum wage below $10 per hour is not a binding minimum wage in this market. (Economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage.) a. True b. False

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  1. 22 November, 07:35
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    False

    Explanation:

    Binding minimum wage refers to the minimum wage that not just prevent the labor market from reaching equilibrium but also exceed the wage equilibrium in the market. If the minimum wage is set higher than the equilibrium, most people in the market have to move the wage equilibrium up.

    Given that economists call a minimum wage that prevents the labor market from reaching equilibrium a binding minimum wage.

    So, a minimum wage below $10 per hour is a binding minimum wage in this market.

    Hence, the given statement is false.
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