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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
What is the typical effect of a minimum wage law on employment levels?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
Minimum wage laws generally cause increased unemployment primarily among low-skilled workers, as employers reduce hiring when wages are artificially raised above the market-clearing level. High-skilled labor markets are less affected because workers there often earn wages above the minimum wage already.
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?