Economics midterm 2 - Economics midterm 2 An effective...

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Economics midterm 2 An effective production quota lowers the marginal cost of production The more elastic the supply, the larger is the amount of the tax paid by buyers When a minimum wage is set above the equilibrium wage rate, unemployment increases A fact that argues in favor of prohibition and against tax on illegal drugs is that prohibition sends a signal that might influence preferences The more inelastic the demand, the larger is the amount of the tax paid by buyers A minimum wage is a price floor applied to labor markets With the rent ceiling, the market is inefficient because the marginal social benefit from the last apartment rented is greater than its marginal social cost With the rent ceiling, the housing market is fair by both the fair result and fair rule views In the labor market, the supply curve measures the marginal social cost of labor to workers, and the demand curve measures the marginal social benefit from labor When selling drugs is illegal, the cost of breaking the law is added to the minimum
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This note was uploaded on 10/16/2011 for the course ENGLISH 101 taught by Professor Parkin during the Summer '11 term at Wilfred Laurier University .

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