ECON 101 2Midtermreview

Figure 64 illustrates this inefficient outcome a

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Unformatted text preview: f opportunity, not equality of income. Robert Nozick suggested that fairness is based on two rules: The state must create and enforce laws that establish and protect private property. Private property may be transferred from one person to another only by voluntary exchange. This means that if resources are allocated efficiently, they may also be allocated fairly. Chapter 6: Government Action in Markets A Housing Market with a Rent Ceiling Ø། A price ceiling or price cap is a regulation that makes it illegal to charge a price higher than a specified level. Ø། When a price ceiling is applied to a housing market it is called a rent ceiling. Ø། If the rent ceiling is set above the equilibrium rent, it has no effect. The market works as if there were no ceiling. Ø། But if the...
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