Lecture-6 - Supply Demand and Government Policies Price...

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Supply, Demand, and Government Policies
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Price ceiling A legal maximum on the price at which a good can be sold.
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Figure 1a A Market with a Price Ceiling
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Figure 1b A Market with a Price Ceiling
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Price floor A legal minimum on the price at which a good can be sold.
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Figure 4a A Market with a Price Floor
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Figure 4b A Market with a Price Floor
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Figure 5a How the Minimum Wage Affects the Labor Market
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Figure 5b How the Minimum Wage Affects the Labor Market
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Taxes All governments - use taxes to raise revenue for public projects, such as roads, schools, and national defense. Because taxes are such an important policy instrument, and because they affect our lives in many ways. When the government levies a tax on a good, who actually bears the burden of the tax? The people buying the good? The people selling the good? Or if buyers and sellers share the tax burden, what determines how the burden is divided? Can the government simply legislate the division of the burden?
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Taxes The term tax incidence
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