Figure: Minimum Wage for Country A Refer to the figure. The deadweight loss from the $8 minimum wage is area:

Question

Figure: Minimum Wage for Country A  Refer to the figure. The deadweight loss from the $8 minimum wage is area:

Quizplus · Accepted Answer

The deadweight loss is the loss of economic efficiency that occurs when the equilibrium wage rate is forced above the market-clearing level by government intervention. In this case, the $8 minimum wage is above the equilibrium wage rate of $6, which creates a deadweight loss. The area of this deadweight loss can be calculated as the triangle formed by points b, c, and e. Therefore, the correct answer is C) ce.

Figure: Minimum Wage for Country a Refer to the Figure