Question

True or false: a minimum wage below $10 per hour is a binding minimum wage in this market.

Answer 1

It's FALSE.


To be able to make the minimum wage be binding, an expert in economics calls it a minimum gross to prevent the industry market from accomplishing equilibrium a binding smallest amount wage.
It must be set above the equilibrium gross. However, below or at least $10 per hour would not be binding.

Answer 2

The statement is False.

Further Explanation:

Minimum wage: The government implements a price floor to ensure that the employers should pay their employees a minimum wage rate. If the wages are paid at a rate that is lower than the rate fixed by the government, it is considered as illegal. A minimum wage is binding when it is set more than the equilibrium wage. When a minimum wage is binding, wage-fixing is blocked. The market is also prevented from apportioning labor resources. If it is below the equilibrium wage, then the employees will be underpaid. When the minimum wage is more than the equilibrium wage then some companies are not able to hire the employees, and this will lead to an increase in unemployment. It will lead to a new minimum wage rate.

 Therefore, a minimum wage that is binding minimum wage is set above the equilibrium wage. Thus minimum wage below $10 is not a minimum wage that is bidding in the market.

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Answer details:

Grade: High School

Subject: Economics

Chapter: Demand and Supply

 

Keywords: a minimum wage below $10 per hour is a binding minimum wage in this market, true or false, prevents the labor, market from reaching, equilibrium, a binding minimum wage, labor resources.