Which of the following statements are true? Check all that apply.

In this labor market, a minimum wage of $7.50 is binding.

If the minimum wage is set at $10.50, the market will not reach equilibrium.

In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Binding minimum wages cause frictional unemployment.

Question

Beau Garrison

Social Studies

24 February, 21:58

Which of the following statements are true? Check all that apply.

In this labor market, a minimum wage of $7.50 is binding.

If the minimum wage is set at $10.50, the market will not reach equilibrium.

In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Binding minimum wages cause frictional unemployment.

+5

Answers (1)

Know the Answer?

Kennedy Poole · Answer 1

Suppose a bill is passed to make minimum hourly wage as $7.50, the implications would be that:

-If the minimum wage is set at $10.50, the market will not reach equilibrium.

-In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium.

Therefore only the two above listed statements would be TRUE.