Suppose you were to hear an economist oppose the minimum wage on the grounds that she estimated the loss to small businesses and to the unemployed and found that it exceeded the gain to workers getting a higher wage. You would know her to be relying on the ____ argument.

Question

Quizplus · Accepted Answer

The economist is estimating the loss in producer surplus (small businesses) and consumer surplus (unemployed) and comparing it to the gain in producer surplus (workers getting higher wage) which is an example of using producer and consumer surplus analysis. Therefore, the answer is D.

Suppose You Were to Hear an Economist Oppose the Minimum