Changes

:a. horizontal b. vertical  (Isaac)

:a. horizontal b. vertical  (Isaac)

4. '''''Why''''' is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?

4. '''''Why''''' is the name "necessity" given to a good that has a price elasticity of less than one, and the name "luxury" given to a good that has a price elasticity of more than one?

:An example of a normal good is a new car; an example of an inferior good would be a used car.  (Matt)

:An example of a normal good is a new car; an example of an inferior good would be a used car.  (Matt)

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.

: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)

: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 a price ceiling.  Therefore, because of a high demand and a low supply due to the price ceiling, there becomes a shortage of goods.  (Sean)

 

:It creates a shortage of goods.  At a lower price there is more demand.  When the price is set below the equilibrium the amount demanded increases, at the same time the supply decreases crerating an imbalance/shortage in supply relative to demand.  (Kate)

===Honors===

===Honors===

10.  Do you support "free trade" because it creates wealth, or do you oppose it for simply redistributing wealth to foreigners, some hostile to the United States?

10.  Do you support "free trade" because it creates wealth, or do you oppose it for simply redistributing wealth to foreigners, some hostile to the United States?

:

:Free trade is something I agree with.  Organically occurring market forces are more efficient and furnish better results than any government intervention could conceivably attain.  The general public typically doesn't care where products come from, they just want the cheaper price tag, resulting in increased demand for those goods. ..."  (Sarah)

11.  What is your view of the minimum wage?  Should it be increased?

11.  What is your view of the minimum wage?  Should it be increased?