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Market Efficiency and Government Intervention

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Has the time come for government to abolish rent controls and the minimum wage? What do you think? Do both rent controls and minimum wage laws achieve their intended purposes? Provide two examples. Are there any unintended consequences? Provide two examples.

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Market Efficiency and Government Intervention is discussed very comprehensively in this explanation..

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Has the time come for government to abolish rent controls and the minimum wage? What do you think?
Yes, the time has come for government to abolish rent controls and minimum wages. Each of these distort the market for housing and the market for labor. In case of rent controls there are fewer apartments available for rent and in case of minimum wages there is large scale unemployment. Setting price floors above equilibrium level in case of wages leads to unemployment.
Do both rent controls ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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