Econ 151 Ch4 Market Effects Flashcards
0
Q
Milk price supports
A
- a surplus of milk
- government payments to farmers to buy unsold milk
- need to store or otherwise dispose of unsold milk
- too many resources allocated to milk production
1
Q
Gasoline price controls
A
- shortages
- extensive non price rationing
- high real prices for gas
- delayed adoption of more fuel efficient card
2
Q
Rent control
A
- housing shortage
- transfer of wealth
- reduced maintenance
- increased discrimination
3
Q
Minimum Wage
A
- labor surplus
- lower wages in sectors not covered by minimum wage
- reduced incentives for young people to train
4
Q
Interest rate ceiling
A
- credit shortages
- additional fees and shortages
- increased discrimination
- more loan sharking
