-In the figure above, if the minimum wage is $8 per hour, then
A) resources used in job-search activity increase compared to the situation before the minimum wage.
B) the deadweight loss is minimised.
C) it is legal to hire workers for a wage below the minimum wage because otherwise unemployment would result.
D) Both answers A and B are correct.
E) Both answers B and C are correct.

Question

-In the figure above, if the minimum wage is $8 per hour, then
A) resources used in job-search activity increase compared to the situation before the minimum wage. 
B) the deadweight loss is minimised. 
C) it is legal to hire workers for a wage below the minimum wage because otherwise unemployment would result. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Quizplus · Accepted Answer

When a minimum wage is set above the equilibrium wage, it creates a surplus of labor (unemployment) because the quantity of labor supplied exceeds the quantity demanded at that wage. This leads to more people spending time and resources looking for jobs, hence increasing the resources used in job-search activity.

-In the Figure Above, If the Minimum Wage Is $8