ECON 203 1nd Edition Lecture 9Outline of Last Lecture I. price ceilingII. price floorOutline of Current LectureI. price floorCurrent LectureI. Price Floor continued.Ex.) minimum wages for unskilled labor -A price floor creates a need for an allocating scheme(i.e. first come first served, personal preferences, etc.)-the market claims that all supplied jobs(submitted applications) are equal, but there are small differences in applicantsthat make an employer chose 1 person over anotherMinimum wage causes:-lower Consumer surplus-higher producer surplus( but it creates fewer producers(workers))-lower gains from trade-deadweight loss present-some type of allocating scheme must be adopted -additional unemployment (QSmw ˃QDmw)Minimum wage supprts productivity through technologyPeople have wage contracts based on minimum wageA price floor imposes higher price than equilibriumPrice floor vs. EquilibriumThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-society is worse off with DWL-consumers are also worse off-PS is larger, but for less
View Full Document
Unlocking...