ECON 101 2Midtermreview

The more elastic the supply the larger is the buyers

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Unformatted text preview: efficiency of Rent Ceilings Ø། A rent ceiling set below the equilibrium rent leads to an inefficient underproduction of housing services. Ø། The marginal social benefit from housing services exceeds its marginal social cost and a deadweight loss arises. Ø། A rent ceiling decreases the quantity of housing supplied to less than the efficient quantity. Ø། A deadweight loss arises. Ø། Producer surplus shrinks. Ø། Consumer surplus shrinks. Ø། There is a potential loss from increased search activity A Labour Market with a Minimum Wage Ø། A price floor is a regulation that makes it illegal to trade at a price lower than a specified level. Ø། When a price floor is applied to labour markets, it is called a minimum wage. Ø། If the minimum wage is set below the equilibrium wage...
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This note was uploaded on 03/29/2014 for the course ECON 101 taught by Professor Vanderwaal during the Spring '08 term at Waterloo.

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