CAS EC 101 Lecture Notes - Lecture 12: Price Controls, Shortage, Excess Supply

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Michael Manove

Document Summary

Cq: suppose in the graph, the government sets a price ceiling at . Then: excess supply will be about 1000, the market will be in equilibrium, excess demand will be about 500, excess demand will be about 1500. 241 years ago, in 1775, americans rebelled against the british, because americans didn"t want to pay british taxes. Then in 1791, farmers rebelled when the us federal government tried to collect. Most american voters are still opposed to taxes - we prefer other kinds of government intervention. When americans were asked, what is the best way to increase the energy-efficient of cars , they want laws instead of taxes. The current american view of taxes is undoubtedly the result of bad teaching of economics professors (sarcastic?) Governments tax goods and services for a number of reasons. To discourage the consumption of certain goods and services.