ECON 2010 Lecture Notes - Lecture 11: Demand Curve, Seigniorage, Sales Tax

• School: CU-Boulder
• Department: Economics
• Course: ECON 2010
• Professor: Zacharyszlendak

Document Summary

Lecture 11 notes: price controls, taxes and subsidies. A non-binding price does not have any effect on the market incomes. Us = #1 food producer in the world. Illegal way to get around price controls or regulation. Inefficient for society because property rights are not guaranteed and there are additional transaction rights. Societal well-being would be greater without black market. Only forms when ceiling point is below equilibrium. 3 main ways of funding: taxes. Take a portion of economic value produced. Income, payroll, corporate, capital gains, tariffs, estate, sales are all taxes: borrowing. Government sells bonds, which are promised to pay back in future with interest: seigniorage. Print money and skim some off the top before letting it circulate. Taxes impact decisions to work, invest and purchase goods and services. Increase the price of goods and services: decreases return to labor and capital.