Question

which of the following statements are true? check all that apply. in this labor market, a minimum wage of $12.50 would be binding. if the minimum wage were set at $9.50, the market would still be able to reach equilibrium. in the absence of price controls, a surplus puts upward pressure on wages until they rise to the equilibrium. binding minimum wages increase the natural rate of unemployment.

Answer 1

A minimum wage of $12.50 would be binding, and at $9.50 the market can reach equilibrium. A surplus puts downward pressure on wages. Binding minimum wages increase the natural rate of unemployment.

Step-by-step explanation:

In the labor market, a minimum wage of $12.50 would be binding since it is above the equilibrium wage level. This means that employers would be required to pay at least $12.50 per hour, potentially resulting in a decrease in employment.

If the minimum wage were set at $9.50, the market would still be able to reach equilibrium. In this case, the wage would be below the equilibrium level, and employers would have the flexibility to hire more workers.

In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium level. It is incorrect to say that a surplus puts upward pressure on wages.

Binding minimum wages increase the natural rate of unemployment, as they can lead to a decrease in employment opportunities for low-skill workers.

Answer 2

A minimum wage of $12.50 would be binding and in the absence of price controls, a surplus puts upward pressure on wages until they rise to the equilibrium.

Step-by-step explanation:

In this labor market, a minimum wage of $12.50 would be binding, while a minimum wage of $9.50 would not be binding. The market would be able to reach equilibrium at a minimum wage of $9.50. However, in the absence of price controls, a surplus puts downward pressure on wages until they rise to the equilibrium.

Therefore, the statements that are true are: A minimum wage of $12.50 would be binding and In the absence of price controls, a surplus puts upward pressure on wages until they rise to the equilibrium.