OVERVIEW: WEEK OF SEPTEMBER 9th
Topic
The topic of section 3.4 is one of my favorites. In this section, you will review how the government attempts to aid consumers or sellers by establishing price controls in what otherwise would be a free market. By establishing either a price floor or price ceiling, the government in essence distorts a properly and efficiently running market, thus creating negative effects that need to be mitigated.
Review the two price controls that exist and see how they distort a market. Pay close attention to how the government then attempts to correct for the effects of price controls by affecting supply and/or demand. Unfortunately, it does so by distorting markets even more.
By the end of this section, you should be able to identify both types of price controls, give an example of each one, illustrate each one and discuss the effects of both types of controls. You should also be able to identify how the government attempts to mitigate the effects of these price controls.
Don't forget to watch the videos. You are responsible for what is reviewed in those videos.
Objectives
By the end of this week you will be able to...
- Differentiate between a price floor and a price ceiling
- Articulate the effects resulting from government price controls
- Using the tools of supply & demand, articulate how the government attempts to correct for the results of price controls.
- Identify at least one market for each type of price control
- Define a black market.
- Discuss why a black market arises.
Weekly Schedule
| Due date | Activity |
|---|---|
| Reading: Textbook Chapter 3, section 3.4 |
|
| Refer to Schedule | Assignment: Relevant Study Guide Questions |
| Sunday, 9/15 | Quiz #3 |