Question on: JAMB Economics - 2012

Here's the breakdown: * **Understanding the Diagram:** The diagram depicts a labor market, with a supply curve (S) and a demand curve (D) for labor. The minimum wage (OW) is set above the equilibrium wage. * **Impact of Minimum Wage:** When a minimum wage is set above the equilibrium wage: * The quantity of labor demanded decreases (employers hire fewer workers because labor is more expensive). * The quantity of labor supplied increases (more people are willing to work at the higher wage). * This creates a surplus of labor, which is unemployment. * **Why other options are incorrect:** * A. Full employment of resources: The minimum wage actually *causes* unemployment, so this is incorrect. *