Suppose that Congress is considering raising the federal minimum wage to $8.00 per hour. Suppose that the equilibrium wage for college-educated workers is $20.00 per hour. If this is true, what impact will the increase in the minimum wage have on the market for college-educated workers?
A. It will have no impact on the market for college-educated workers.
B. It will create a shortage in the market for college-educated workers.
C. It will create a surplus market for college-educated workers.
D. It will reduce the demand for college-educated workers.
Answer: A
Microeconomics
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