CS + PS = net social surplus
Nice: maximize NSS
As an economist who wishes to maximize NSS, do you value producers or consumers?
Gives no shift in supply or demand, what is the optimal policy to maximize NSS?
Restriction on prices
Assume market is functioning perfectly
Maximizes PS & CS
That Guy (TG) above the equilibrium point on the supply curve would work if the
wage was higher
More quantity supplied of labor