ECON 1P91 Lecture Notes - Lecture 6: Price Ceiling, George J. Borjas, Pyrimethamine

• School: Brock University
• Department: Economics
• Course: ECON 1P91
• Professor: Cornelius Christian

Document Summary

Producers raise the prices to reduce shortage. Recap: supply and demand (curve), market eq d=s. When the p* goes down shortage (or p is smaller than market price ceiling. Initially when supply shifts from s1 to s2, price stays at p*1. A price of p*1 causes producers to manufacture qs. Consumers are turned off by higher prices , and reduce qd. Eventually we reach a new equilibrium at p*2 and q*2. Immigration causes wages to fall, and labour to rise sudden shock. Eg: marielitos (1980) from cuba to miami. In 1980, hundreds of thousands of cuban refugees arrived in miami. Natural experiment to find the impact of immigration on wages . George borjas (2017): (cid:361)the wage impact of the marielitos: a reappraisal(cid:362) George finds that marielitos were mostly low-skilled workers, 60% had no hs. In miami, the mariel boatlift increased the number of hs dropouts by 20%