10 . Minimum-wage laws and unemployment

Consider the market for labor depicted by the demand and supply curves that follow.

Labor Demanded La hor Supplied Wage ( Thousands of writers) ( Thousands of writers) Shortage or Surplus? moo E :l _. Shortage Suppose a senator considers introducing a bill to legislate a minimum hou Surplus which of the following statements are true? Checka that apply. Neither In this labor market, a minimum wage of$11.50 would be binding. _ In the absence of price controls. a surplus puts downward pressure on wages until they:r fall to the equilibrium. Binding minimum wages cause structural unemployment. Ifthe minimum wage is set at $15.00, the market will not reach equilibrium.