One way to remove the excess labor supply problem from a minimum wage policy is to have the government hire all unemployed workers at the minimum wage. What is the key drawback of this version of a minimum wage policy?

A) The deadweight loss may increase substantially.
B) The cost to the government may be very large.
C) Consumer surplus losses increase further.
D) A and B are correct.
E) B and C are correct.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved or is not achievable.

Government Cost

Government cost refers to the expenses incurred by the government in the course of its operations, including public services, defense, infrastructure, and social programs.

Minimum Wage

The lowest legal salary that employers can pay workers, set by government legislation.