Feb27 - I-Clicker Questions 1) A legal minimum wage or a...

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I-Clicker Questions 1) A legal minimum wage or a so-called “living wage” increases unemployment, lowers hours, creates excess supply of labor, and increases the earnings of those who are able to keep their job through the minimum wage implementation. 2) With a positive externality or external benefit, marginal social benefit is greater than marginal private benefit and the good is underproduced. 3) The inefficiency from a positive externality can be internalized by either subsidizing suppliers to supply more of the good or subsidizing consumers to buy more of the good. 4) With a negative externality or external cost, marginal social cost is greater than the marginal private cost and the good is overproduced. 5) Quasi market approaches to internalize a negative externality, such as marketable permits and pollution taxes, are ususally ore effective and more efficient than regulation. Positive and Negative Externalities- source of market inefficiency Positive externalities/external benefit
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This note was uploaded on 03/15/2012 for the course ECO 2023 taught by Professor Mccaleb during the Spring '08 term at FSU.

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Feb27 - I-Clicker Questions 1) A legal minimum wage or a...

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