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At the minimum wage (set above the equilibrium wage), A : all individuals who end up working are paid less than if they...

At the minimum wage (set above the equilibrium wage),

A : all individuals who end up working are paid less than if they were paid the equilibrium wage.

B : none of the workers will lose there jobs or find themselves working fewer hours.

C : none of the individuals who end up working are paid more than if they were paid the equilibrium wage.

D : there will be fewer people working (or fewer labor hours demanded) than at the equilibrium wage.

E : none of the above

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Answer #1

Answer: D : There will be fewer people working (or fewer labor hours demanded) than at the equilibrium wage.

A minimum wage set above the equilibrium wage rate creates inefficiency and a dead weight loss. when a minimum wage is introduced above the equilibrium wage, the quantity of labor demanded decreases and the quantity of labor supplied increases thus creating unemployment.

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