Shown below is the graph for the labor market Setting the mi

Shown below is the graph for the labor market. Setting the minimum wage at $12/hour, how many workers will be unemployed? Wages per hour Labor ?Supply $12 -·-X 10 $7 Labor Demand 80 85 100 107 115 Number of Workers Employed O 80 O 100 O 35

Solution

Option 4. 35

Explanation:

The labor supply curve shows that when the wage is $12, there will be 115 workers willing to work.

The labor demand curve shows that when the wage is $12, only 80 workers would be demanded i.e. hired.

So, 115 - 80 = 35 workers would be unemployed.