Beyond the Sound Bites:
UCLA professor Lee Ohanian discusses the economics of the Super Bowl.
The Ch. 4 Sec. 3 Quiz is on Wednesday.
The Ch. 4 Sec. 2 Quiz Make-Up is today.
The electronic edition of the Philadelphia Inquirer is available. We have the Sunday edition, available on Mondays, in addition to the Tuesday through Friday editions on the other days.
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How do surpluses and shortages help establish the equilibrium price?
Explaining and Predicting Prices
Change in Supply
Figure 6.3 Changes in Prices
Change in Demand
Change in Supply and Demand
The Importance of Elasticity
Real Estate Agent
Real estate agents, among others such as actors (including voice actors), artists, novelists, freelance writers, and similar creative artists as talents are generally compensated on a "per job" basis, and thus are not treated as employees; as freelancers, they file a 1099 form for their taxes. They are not, strictly speaking, an employee of a company. One proposal of health care might be to demand that employers purchase health care and to be treated as regular employees of companies.
This is an expensive proposition, likewise, a 1099 provision, voted down on 2 February 2011, is a piece of "Obama’s health care overhaul, rolling back a new tax reporting requirement that’s been universally panned by business owners. . . . The provision would have required business owners to file 1099 tax documents on all cumulative purchases from a single vendor that total more than $600 in a year."
The amendment was proposed by Sen. Debbie Stabenow (D-Mich.).
“This amendment is a common-sense solution for business owners who need to be focused on creating jobs, not filling out paperwork for the IRS,” she said.
Prices and Competitive Markets
How does the elasticity of a good affects its price?
Business Week Newsclip
What's Raining on Solar's Parade?
Solar Power: Why Economics Matters, 7:12
In-class assignment: with a partner, answer the following questions.
Which influence is greatest on this "green" company?
What issue was preeminent in the 70s?
What two issues are the focus of this company?
What is the number one "pocketbook" issue?
Does the skepticism (after Climategate) change their sales pitch?
What are their ideas about global warming like? What type of thing?
Nevertheless, what argument is convincing for some people?
What is to stop concerns about solar from happening again?
What happened to oil prices after Reagan was elected?
Is the world-wide demand for oil rising or falling? (As a result of supply and demand)
Ch. 6 Sec. 2 Review
In-class assignment, with a partner, complete the graphic organizer to show how a change in demand and supply affects the price of a product.
Section 3 Social Goals and Market Efficiency
Prices work as a system to allocate resources between markets. However, if prices are fixed in one market, temporary shortages and surpluses tend to become permanent. A price ceiling, such as rent control, is one form of fixed price; a price floor, such as the minimum wage, is another example. Agriculture is especially hard-hit by price changes, because demand and supply tend to be inelastic, while weather often causes the supply curve to change. Therefore, to help farmers, the federal government established the Commodity Credit Corporation (CCC), an agency in the Department of Agriculture. The CCC then used a target price, which is essentially a price floor, to help stabilize farm prices. As a result, over the years, the government has established other forms of support for agriculture in the economy.
In-class assignment, with a partner, complete the cause-and-effect chart by explaining the effects of price ceilings and price floors.
Guide to Reading
Price Floors and Price Ceilings, 5:59
In-class assignment: with a partner, answer the following:
What happens when the government interferes with the market mechanism by artificially imposing a "better" price?
What may interfere with the market?
How does the video define price floor?
Who is the price floor meant to protect?
What is the seller protected from?
What kinds of businesses would warrant such help?
Rather than impose an artificial price on the market resulting in all manner of other problems is there any way to manage the market to get the equilibrium price up to Pf?
Define price ceiling.
Who is a price ceiling meant to protect?
Would you rather pay a higher price for gas if you knew you could get it, or, would you rather pay a lower price for gas but take the chance none would be available?
Are there ways to make a lower price of gas available instead of imposing a government price?
Minimum Wage, 2:30
In-class assignment, with a partner, answer the following:
Before Congress, who testifies in favor of minimum wage?
Do labor unions generally work for minimum wage?
Why do labor unions favor a minimum wage?
Which groups are often harmed by the minimum wage?
Are small businesses harmed?
Issues in the News
Minimum Wage Rise Hurts Students
Distorting Market Outcomes
Figure 6.4 Price Ceilings
Figure 6.5 Price Floors
What are the negative and positive aspects of price ceilings and price floors?
Agricultural Price Supports
Figure 6.6 Deficiency Payments
Conservation "Land Banks"
Reforming Price Supports
Continued Agricultural Support
What has been the effect of agricultural price supports?
When Markets Talk
Can you think of any other examples of markets "talking"? Explain
In-class assignment, with a partner, use the graphic organizer to illustrate how price floors affect quantity demanded and supplied.
Did You Know?
Profiles in Economics
Margaret (Meg) Whitman, eBay
Debates in Economics
Should College Athletes Be Paid?
Should College Athletes Get Paid?" 3:14
In-class assignment, with a partner, summarize the perspectives from players, a coach, and an administrator, about whether college athletes should get paid or not.
Ch. 4 Prep
Multiple Choice Quiz
Ch. 5 Prep
Chapter 5 Supply Multiple Choice Quiz
Chapter 5 Puzzle
Chapter 5 Supply Flashcards
Ch. 6 Prep
Chapter 6: Prices and Decision Making
Multiple Choice Quiz
Academic, Glossary, People/Places/Events
Chapter 7 Preview
Ian Hunter- Shrunken Heads, 7:46
Email (or hand in hard copy) to email@example.com.
1. p. 161, #3-6
1. p. 161, #7-8
1. p. 162, #1-2
1. p. 164, #1-6 (just answer the correct letter)
1. p. 164, #7