have changed, only that the changes require them to revisit previous decisions they made about supply and

demand. Price controls hide information about the true scarcity of products and thereby cause misallocation

of resources.

Self-Check Questions

1. In the labor market, what causes a movement along the demand curve? What causes a shift in the demand

curve?

2. In the labor market, what causes a movement along the supply curve? What causes a shift in the supply

curve?

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4 • Self-Check Questions 107

3. Why is a living wage considered a price floor? Does imposing a living wage have the same outcome as a

minimum wage?

4. In the financial market, what causes a movement along the demand curve? What causes a shift in the

demand curve?

5. In the financial market, what causes a movement along the supply curve? What causes a shift in the supply

curve?
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