[JRyan154]

I feel like this topic should be easy, but for some reason I am having trouble grasping it. This question has me confused:

An increase in the min. wage will:

I. Will move suppliers down the labor demand curve, causing the quantity of labor demanded to fall

II. Is likely to increase the supply of labor, as more people will be willing to work for a higher wage

The answer is Neither I or II are correct. I originally thought both of these would be correct. Wouldn’t the increase in wages cause suppliers to demand less labor since it will be costing them more? And wouldn’t more people be willing to work for that higher wage? I’m guessing it’s something simple in the wording that I am missing, but right now this question is confusing the heck out of me.

AUD: 78
BEC: 81
FAR: 72 (TBD)
REG: TBD (2/14/14) <3

[Jaimcpa]

Supply of labor would go down as people would be trying to grab jobs. If supply goes down demand goes up. That's how I look at it at least.

FAR- 73, 10/07/2013
REG- 8/31/2013
AUD- TBD
BEC- TBD

MAcc
Main: Becker Self-Study 2013. Supplements: Ninja / Wiley TB / CPAExcel (Bought before I received an offer).

[Author]

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