Economics (AS & A Level) · Oct / Nov 2021 · Paper 32 · Question 17

The diagram shows the effect of the introduction of a minimum wage (W_M) in the labour market. [diagram: labour market with wage rate on vertical axis, quantity of labour on horizontal axis, downward-sloping demand curve D_L, upward-sloping supply curve S_L, equilibrium at W_L and Q_L, minimum wage W_M above equilibrium] When would such a minimum wage be least beneficial to workers who are currently employed?

1. Aif demand for the product increases
2. Bif the elasticity of demand for the workers were high
3. Cif the elasticity of supply for the workers were high
4. Dif the productivity of the workers were to increase

As printed in the paper