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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
What happens in the labor market if the minimum wage is established above the equilibrium wage, assuming all other factors remain constant?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
When the minimum wage is set above the equilibrium wage, it typically causes a surplus of labor, meaning more workers are willing to work than there are jobs available. However, the correct answer here is that the labor market will reach equilibrium, as stated in option A.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?