Changes

2. Explain the  concept of income elasticity.

2. Explain the  concept of income elasticity.

:Income elasticity is defined as the percent change in quantity divided by the percent change in income, explaining the fact that as a person's income decreases, they have a lower demand for most goods--they cannot afford as much--and the corollary concept: when their income increases, the demand increases.  Goods where the demand decreases when income increases are inferior goods, less desirable substitutes for something. A used car is an inferior good.  (Duncan)

:Income elasticity is defined as the percent change in quantity divided by the percent change in income, explaining the fact that as a person's income decreases, they have a lower demand for most goods--they cannot afford as much--and the corollary concept: when their income increases, the demand increases.  Goods where the demand decreases when income increases are inferior goods, less desirable substitutes for something. A used car is an inferior good.  (Duncan)

Editor's Note:  this question has a mistake.  It should have said "'''income''' elasticity" rather than "price elasticity."

Editor's Note:  this question has a mistake.  It should have said "'''income''' elasticity" rather than "price elasticity."

:A necessity is considered income elasticity because it is something that is needed, whether income is high or low. A luxury good is not a needed necessity therefore it is not purchased as often if the income is low.  (Amanda)

:A necessity is considered income elasticity because it is something that is needed, whether income is high or low. A luxury good is not a needed necessity therefore it is not purchased as often if the income is low.  (Amanda)

7.  A "price ceiling" is a type of price control that sets the maximum price allowed by law for something (like a real ceiling).  A "price floor" is a type of price control that sets a minimum price allowed by law for something (like a real floor).  Does a price ceiling that is set below the equilibrium (free market) price cause a surplus or a shortage?  Using the graph in this lecture, explain why a surplus or a shortage is created by a price ceiling.

7.  A "price ceiling" is a type of price control that sets the maximum price allowed by law for something (like a real ceiling).  A "price floor" is a type of price control that sets a minimum price allowed by law for something (like a real floor).  Does a price ceiling that is set below the equilibrium (free market) price cause a surplus or a shortage?  Using the graph in this lecture, explain why a surplus or a shortage is created by a price ceiling.

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:A price ceiling set below the free market equilibrium will cause a shortage.  Because the price is set below the equilibrium, the demand for the goods will go up.  However, the quantity supplied is lower than it would be in a free market, because there is less money to be made by selling those goods with ap rice ceiling.  Therefore, because of a high demand and a low supply due to the price ceiling, there becomes a shortage of goods.  (Sean)

===Honors===

===Honors===

:Minimum wage slows the market and the people participating within it. Minimum wage pushes already working people out of their jobs. It also encourages children to quit school before finishing their education. Minimum wage is an all around poor option and should not be employed.  

:Minimum wage slows the market and the people participating within it. Minimum wage pushes already working people out of their jobs. It also encourages children to quit school before finishing their education. Minimum wage is an all around poor option and should not be employed.  

When minimum wage is employed it puts people who are already working out of a job. It does this because when paying a higher minimum wage is forced upon the employer they naturally want to pay less and therefore fires employees in order to conserve money. When this happens there are fewer jobs available. However, this does not seem to faze the school drop outs.

:When minimum wage is employed it puts people who are already working out of a job. It does this because when paying a higher minimum wage is forced upon the employer they naturally want to pay less and therefore fires employees in order to conserve money. When this happens there are fewer jobs available. However, this does not seem to faze the school drop outs.

These school drop outs are searching for a job because the opportunity to make the set amount of money seems appealing. This appeal leads them to drop out of school where they could have formed a far better future for themselves. Now, they must stay in the same position with no hope of a real job.  

:These school drop outs are searching for a job because the opportunity to make the set amount of money seems appealing. This appeal leads them to drop out of school where they could have formed a far better future for themselves. Now, they must stay in the same position with no hope of a real job.  

Minimum wage only serves to hold back its participants. It puts employees out of work. It also attracts those who are not in a position to need to be employed, but are just looking for the easy way out. It encourages individuals to not do the best they can. For all of these reasons I affirm that minimum wage should not be increased and is a poor ideology to start.  (Elizabeth)

:Minimum wage only serves to hold back its participants. It puts employees out of work. It also attracts those who are not in a position to need to be employed, but are just looking for the easy way out. It encourages individuals to not do the best they can. For all of these reasons I affirm that minimum wage should not be increased and is a poor ideology to start.  (Elizabeth)

12.  Describe and discuss how wealth is created in society.

12.  Describe and discuss how wealth is created in society.

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