One Way to Remove the Excess Labor Supply Problem from a Minimum

question 36

Multiple Choice

One way to remove the excess labor supply problem from a minimum wage policy is to have the government hire all unemployed workers at the minimum wage. What is the key drawback of this version of a minimum wage policy?

• A) The deadweight loss may increase substantially.
• B) The cost to the government may be very large.
• C) Consumer surplus losses increase further.
• D) A and B are correct.
• E) B and C are correct.

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Definitions:

Loudness

The perceptual characteristic of sound that enables the listener to judge levels of sound intensity.

Sound Waves

Sounds that move through the air or other substances and become audible when they arrive at the ear of a human or animal.

High-frequency

Refers to a characteristic or phenomenon occurring at a rapid rate within a short time period, often used in the context of signals, trading, or waves.

Age

A measure of the length of time that an organism has been alive or a thing has existed.