O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2017 · Q111 Mark

The diagram shows two curves. One is the demand for labour, the other is the supply of labour. A government fixes a minimum wage (Mw) that must be paid by employers. [Figure 11.1] What will be the effect of this minimum wage?

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Afewer workers will be employed

Bno change in the market equilibrium

Cno worker will be paid wage W

Dsupply of labour will exceed demand

✓ Correct answer

B: no change in the market equilibrium

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2017 Paper 1 Variant 2, question 11.

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