What are the effects of a minimum wage set below the equilibrium wage?

If the equilibrium wage is below the minimum wage, however, then there will be a surplus of labor: at the artificially high minimum wage, aggregate demand for labor is lower than aggregate supply, meaning that there will be unemployment (surpluses of labor).

What impact would an increase in the minimum wage have on the quantity demanded and quantity supplied of Labour?

A change in the wage or salary will result in a change in the quantity demanded of labor. If the wage rate increases, employers will want to hire fewer employees. The quantity of labor demanded will decrease, and there will be a movement upward along the demand curve.

What is the effect of an increase in the minimum wage in the labor market an increase in the minimum wage quizlet?

An increase in the minimum wage can cause an increase in income for some workers who might be asked to work the same number of hours (or even more hours), while other workers might be given reduced work hours or some might even getlaid off which would result in these workers receiving less or even no income.

Why does an increase in minimum wage increase unemployment?

The single largest problem with increases to the minimum wage is that they result in higher unemployment for low-skilled workers and young people. Put simply, increases in the minimum wage increase labour costs to employers who respond by reducing the number of employees and/or the number of hours worked.

What are the effects of a minimum wage set below the equilibrium wage quizlet?

if it is set below the equilibrium rent. When a minimum wage is inefficient, the firms’ surplus and workers’ surplus shrink, a deadweight loss arises, and resources are lost in job search.

How would an increase in the minimum wage affect labor demand and labor supply?

The Effect of a Minimum Wage Increase on Employment and Unemployment. At the same time, the higher minimum wage means that more people would like jobs. The increase in the amount of labor that people would like to supply, and the decrease in the amount of labor that firms demand, both serve to increase unemployment.

What impact would an increase in the minimum wage have on the quantity demanded and quantity supplied of Labour quizlet?

What impact would an increase in the minimum wage have on the quantity demanded and quantity supplied of labour? It would decrease the quantity of labour demanded while increasing the quantity supplied.

How do wage increases affect the demand for and supply of labor quizlet?

When the supply exceeds the demand for labor the wages paid will go down, but if demand exceeds supply wages will increase. Assuming that there are no laws and regulations hold wages at a set minimum.