Suppose there is a semiskilled labor market and two different unskilled labor markets. Initially, all three markets are in competitive equilibrium. What would happen if the government imposed a minimum wage rate above the competitive equilibrium rate in one of the unskilled labor markets?
a. Wage rates will rise in all three markets.
b. Wage rates will rise in both unskilled labor markets, but remain unchanged in the semiskilled labor sector.
c. Wage rates will rise in the semiskilled labor market and in the unskilled labor market covered by the minimum wage, but fall in the other unskilled labor market.
d. Wage rates will rise in the unskilled labor market covered by the minimum wage, remain unchanged in the other unskilled labor market, and fall in the semiskilled labor market.
e. Wage rates will rise in the unskilled labor market covered by the minimum wage, but remain unchanged in the other two markets.
C
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A. True B. False
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