When a minimum wage is ________,the firms' surplus and workers' surplus shrink,a deadweight loss ________,and resources are lost in job search.
A) inefficient; arises
B) inefficient; disappears
C) efficient; arises
D) efficient; disappears
E) nonexistent; arises

Question

Quizplus · Accepted Answer

When a minimum wage is inefficient, it leads to a deadweight loss that arises due to the reduction of firms' and workers' surplus. Additionally, the resources are wasted in job search as workers try to find employment opportunities that pay above the minimum wage.

When a Minimum Wage Is ________,The Firms' Surplus and Workers