Trying to manipulate market outcomes

Trying to manipulate market outcomes - • Quantity...

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Trying to manipulate market outcomes Price controls o Price ceilings- Government sets a maximum limit on price. Usually a line below equilibrium. You’re going to get a deficit. o Price Floors- Government sets a minimum limit on price. Usually a line above equilibrium. You’re going to get surplus. Ex: Minimum Wage.
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Unformatted text preview: • Quantity Controls (Quotas) • Taxes • “Invisible hand” = Adam Smith in the Wealth of Nations • Excise Taxes- A government charge on the sale of a good or service o Incidence- who actually pays the tax...
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This note was uploaded on 03/30/2008 for the course AAEC 1006 taught by Professor Mjellerbrock during the Spring '07 term at Virginia Tech.

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