Suppose the equilibriumwage rate for apricot pickers is $6.00 per hour and at th

Question

Suppose the equilibriumwage rate for apricot pickers is $6.00 per hour and at that wagerate the equilibrium quantity of apricot pickers employed is14,000. If the minimum wage is set at $6.50 per hour, then the quantity ofapricot pickers employed increases. wage rate forapricot pickers decreases. quantity ofapricot pickers employed decreases. quantity ofapricot pickers employed does not change. quantity ofapricot pickers demanded does not change and the quantity ofapricot pickers supplied does not change

Explanation / Answer

The equilibrium wage is the wage at which both the supply and thedemand for apricot pickers are equal. The government set theminimum wage to be 50 cents higher than the equilibrium wage. If the minimum wage is higher, more people will want to work, butfewer companies will be willing to hire them at the higherrate. They were willing to hire exactly 14000 when the wagewas $6.00. After the wage increased to $6.50, they will bewilling to hire fewer. Because not as many people will behired, the quantity of apricot pickers employed decreases. The correct answer is C.

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