ECON 201 Lecture Notes - Lecture 5: Fair Labor Standards Act, Sucker Free, Price Ceiling
Document Summary
Chapter 3 continued: always downward pressure on price when surplus occurs, coordinate actions. * esult: ^(cid:859)s qd & qs as result of surpluses a(cid:374)d shortages: motivate, d(cid:859)ers (cid:449)ork harder to err 20286 to afford o(cid:859)s (cid:271). (cid:859)ers i(cid:374)(cid:272)rease effi(cid:272)ie(cid:374)(cid:272)(cid:455) to (cid:373)a(cid:454) profits: conclusions: Market orga(cid:374)izatio(cid:374) is the result of market pri(cid:272)e(cid:859)s not central planning. At equilibrium: economics efficiency is met because all of the potential consumers & producers gains from exchange have occurred: two qualifications for efficient market organization, the presence of competitive markets, well-defined and enforced private property rights. 1. resource market closely linked to product market: displa(cid:455)ed (cid:271)(cid:455) lo(cid:449)er portio(cid:374) of (cid:858)cir(cid:272)ular flo(cid:449) diagra(cid:373)s(cid:863) Households- s resources (i. e. labor: relationship is direct, decrease demand for a good causes decease in demand for resources, decrease supply of a resource then a decrease in supply of the goods. Economics of price controls: price ceilings, def: legally established maximum p sellers may charge, direct effect: lower price.
