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Unformatted text preview: Minimum wage price controls Example of price floor Labor market lingo Price = Wage Supplier = People Consumer = Firm Surplus = Unemployment Transaction costs Departure from the ideal supply and demand model Role of the middleman o Middlemen reduce transaction cost o With the middleman The price that the seller gets is greater The price that the buyers pay is lower Total quantity is greater o Money is a middleman The value of money is in reduction of transaction cost What is the alternative? o Barter method of exchanging of goods or services directly without medium of exchange such as money Even economies with daily inflation of 10% did not give up money...
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This note was uploaded on 02/25/2012 for the course MGMT 4375 taught by Professor Eixmann during the Fall '11 term at Texas State.
- Fall '11