Today we will learn about the effects of government intervention in free markets. Use this checklist to be sure you've done all you need to do on this topic. Specifically, we will look at the effects of price controls and taxes on markets. Click here (Chapter 6 Notes Page) to download a PowerPoint on price controls and taxes and here (Chapter 8 Notes Page) for a more detailed explanation of taxes.
First half hour: Is universal basic income a better approach to poverty reduction than the minimum wage? Your teacher will lecture on the this session's concepts and that question after you watch this video.
Second half hour: Do today's problem of the day (below).
Additional resources: If you need more explanation here are some additional resources you can use.
Read Krugman (Modules 8, 9, and 50)
Watch these videos:
Define equilibrium and allocative efficiency.
Use a different diagram to explain why each of the following government policies would cause allocative inefficiency in the market for lobsters:.
A price floor on lobsters
A price ceiling on lobsters
A per unit subsidy to lobstermen
An excise tax on lobsters