Question
Assume the market wage in industry A is $9/hour and the market wage in industry B is $12/hour and that workers are equally qualified for
Assume the market wage in industry A is $9/hour and the market wage in industry B is $12/hour and that workers are equally qualified for jobs in either industry.Assume further that all things equal, the workers in industry B would rather work in B than in A if the wages were the same.Suppose the government increases the minimum wage to $10/hour.Which of the following would you expect to occur?
a. Workers in industry B will move to industry A, resulting in higher wages and greater employment in industry A.
b. The supply of labor in industry B will increase, resulting in a lower wage and greater employment
c. The supply of labor in industry B will decrease, resulting in a higher wage and lower employment.
d. There will be fewer jobs in industry A, but the wages and employment levels in B will be unaffected.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started