The reservation wage is defined as 12 a the wage of the...

The reservation wage is defined as: 12) ______ A) the wage of the reservation clerk in the tourism industry. B) the minimum wage that an employee is willing to accept for a given job. C) the equilibrium wage. D) the wage rate at which zero hours of labour is supplied by the workers. E) the maximum wage that an employer is willing to pay a worker for a given job.

Transcript

00:01 So here we see about minimum wage, and the very first thing we see is equilibrium wage, right? the minimum wage is increasing the equilibrium wage.

00:07 So we know that there's a market for labor, right? quantity and a price.

00:14 Often here we call the quantity of labor, l for labor, and we call the price the wage, right? so we have demand and supply, right? the supply of labor is people, and the demand for labor, the people who buy labor, our firms.

00:31 We knew that the equilibrium wage prior to the minimum wage was 20, but now the government's going to come in at 20 and say that this is the minimum.

00:40 So now what we're going to get is quantity demanded is going to be low.

00:47 Quantity supplied is going to be high, right? and this is what you'd call unemployment.

00:54 When the wage is set artificially high, lots of people are going to want to work, but not many firms are going to want to pay them.

01:01 Right so um right before the wage was five but at five it doesn't make any difference right at five the minimum wage is what we would call non binding right so we're given four options here and we want to see which is these is correct so the first option is a full employment is what we'll get well this is obviously not right because i just told you that there's probably going to be unemployment, right? when the wages set high, a lot of people are going to want to work.

01:36 Nobody is going to want to hire them.

01:37 Unemployment is not what's going to happen...

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