In the market for domestic workers, the wage rate is currently causing a deadweight loss. The government decides to become more efficient. Which of the following should they do, ceteris paribus? a) Lower the wage rate until the deadweight loss is eliminated. b) Increase the wage rate until the deadweight loss is eliminated. c) They should not change the minimum wage and leave it as is (laissez-faire). d) Decrease government spending until the deadweight loss is eliminated.

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter1: The Economic Approach
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In the market for domestic workers, the wage rate is currently causing a deadweight loss. The
government decides to become more efficient. Which of the following should they do, ceteris paribus?

a) Lower the wage rate until the deadweight loss is eliminated.
b) Increase the wage rate until the deadweight loss is eliminated.
c) They should not change the minimum wage and leave it as is (laissez-faire).
d) Decrease government spending until the deadweight loss is eliminated.

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