Hey David,
Your answer demonstrates that you understand how the governments intervention in setting a minimum wage results in an inefficient allocation of resources. However, in a SAC or exam, I would expect that this response would take too long to write, and since some statements were made more than once, assessors may find it hard to mark, and may not award you full marks (because they mark these questions globally - i.e. they don't read it all, they just look for key words).
I would also not link the mark failure to dynamic efficiency, since it is more related to allocative efficiency - the desirable situation whereby resources are allocated towards the production of goods and services that best satisfy the needs and wants and living standards of society.
With Economics, it's all about detailing the cause and effect relationships in a coherent manner so as to highlight that you know the content inside out.
Here's what I actually wrote for this same question on my SAC:
The governments intervention in setting a minimum wage has resulted in decreased levels of production, increased production costs, and increased costs to consumers, representing failed government intervention. Prior to the setting of the minimum wage, wages were negotiated on an individual employee employer basis, which was determined by the forces of supply and demand. However, under these unregulated conditions, workers were seen working long hours without adequate financial compensation, and often under poor conditions. This market failure was addressed through the setting of the minimum wage, which aimed to reduce income inequality, exploitation and ensure living standards were at reasonable levels. However, this intervention has resulted in a price for labour being far too high in some instances, above the point of equilibrium, causing an oversupply of labour. This has resulted in reduced levels of production due to firms simply reducing their employee numbers and cutting levels of production, and increasing unemployment as a result. This led to the needs and wants of society not being fully maximised, thus reducing allocative efficiency and illustrating an instance of failed government intervention.
I Did like how you mentioned the expansion and contraction in supply and demand, I should have integrated that into my response.
Hope this helps.