ECON 1202 Lecture Notes - Lecture 12: Price Ceiling, Price Floor, Economic Surplus
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ECON 1202 Full Course Notes
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Document Summary
Measures the monetary value of the flow of output of goods and services produced in an economy over a period of time (generally a year) In order to be binding price floors have to be above market equilibrium, and price. C+i+g+(exports-imports) + nfia - indirect taxes - depreciation. Price controls have to be binding in order to affect a market ceilings must be below. Rent controls also have inefficiencies and create dwl. Waste of time- 20 to 30 years to get atop the queue for a direct contract. Insufficiently low quality with no money to reinvest back into apartments. Rent adjusted for inflation yearly, but increases still very small. Governments impose rent controls because if the supply and demand of a city lead to rental rates higher than than the average person can afford, they are meant to lower the price of an affordable rate.
