ECON 200 Lecture 8: Class 8

• School: University of Arizona
• Department: Economics
• Course: ECON 200
• Professor: G. Mateer

Document Summary

05 feb 19: example, paying for a generator for a car, popcorn at the movies (not price gouging) Scalpers help to establish the true market clearing price. Binding price ceilings: black markets and shortages. Binding price floor: the minimum wage, lowest hourly wage rate that firms may legally pay their workers, unintended consequence, unemployment - surplus of workers who don"t have jobs. Minimum wage: the unintended consequence of a binding minimum wage is unemployment. Caused by: decrease in quantity demanded for labor. Increase in quantity supplied of labor: firms replacing low-skilled jobs with capital, if possible, firm relocation to countries (or other states) with lower wages. Imposed massive price controls to curb inflation: end result, nothing was left, kidney transplants, plasma center. Kahoot: comparative advantage implies that you will produce. At the lowest opportunity cost: portugal has a comparative advantage in producing. Cloth: which of the following goods has the most elastic demand.