ECON 1050 Chapter Notes - Chapter 6: Price Ceiling, Marginal Cost, Insulin

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Price ceiling/cap a regulation that makes it illegal to charge a price higher than a specified level. When applied to a housing market, it is called a rent ceiling. Search activity the time spent looking for someone with whom to do business. Black market an illegal market in which the equilibrium price exceeds the price ceiling. Price floor a regulation that makes it illegal to charge a price lower than a specified level. When applied to a labour market, it is called minimum wage. Tax incidence the division of the burden of a tax between buyers and sellers. Benefits principle the proposition that people should pay taxes equal to the benefits they receive from the services provided by the government. The ability-to-pay principle the proposition that people should pay taxes according to how easily they can bear the burden of the tax.

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