Chapter 4 Flashcards
What is price control?
When the government interferes with pricing.
Price ceiling
a legal maximum price the government is mandating, set below the equilibrium
Which price control won’t allow equilibrium to be achieved? (Shortage)
Price ceiling
Price floor (aka price support)
a government-imposed minimum price that must be paid for a particular good or service
Which price control is set above the equilibrium? (surplus)
Price floor
Price Floors in Agriculture began in…
the 1930s
Who Gains from price floors in agriculture?
large commercial farmers
Who loses from price floors in agriculture?
consumers (paying higher prices)
Price floors in the Labor Market was introduced in…
1938
Price floors in the Labor Market helps who?
Lower-income groups
What is the minimum wage?
$7.25 since 2009
Black Market
buyers and sellers will disregard price ceilings, illegally selling goods
Rent control was introduced in…
the 1940s
Rent Control
keeping rents a little bit more affordable, the government tells the landlords what the maximum is they can rent for
Who gains from rent control?
upper income people are benefitting
