Minimum Wage, yo.

I think minimum wage is definitely a good thing to keep. It sets a fair wage for working Americans, which is very important for the well-being of many working-class people. I don't think it should be raised, because that would put a strain on companies with more experience employees and would lead to them having to cut expenses somewhere else. This would most likely have a negative effect on employees. Although a higher minimum wage would certainly be nice, it would simply put too much strain on small businesses to actually work. However, it is extremely important that we actually have a minimum wage and that it is not abolished because it is what maintains fairness and equality in the work force. I think the minimum wage should remain as it is, because it seems to function well this way. Either that or it could be raised a little bit, but not so drastically that it has a huge effect on businesses.

Price Floors, yo.

This is very similar to the price ceilings question... I don't think a price floor should be imposed by the government because companies have the ability to reach their own market equilibrium. If a product is priced too low, people will buy a lot of it and the company will run out of products to sell before the end of the day. Furthermore, the company will be unable to make a profit from products priced too low. Once the company realizes this, they will raise the price to reflect what consumers demand.

Price Ceilings, yo.

I disagree that our government should place price ceilings on certain items. Too much government interference in a market economy could lead to socialism, which is not a path our country wants to take. I think businesses should be able to put whatever price they want on a product, but ultimately the demand for the product will decide what it is actually priced at. If a product is priced too high, consumers will not want to buy it and the company will be forced to reduce the price to a reasonable one. Prices can easily be maintained by the consumers because the prices ultimately depend on how consumers respond to products. The more inelastic the demand proves to be, the higher the price can be raised. Therefore, if people refuse to give in to their desires at insane prices, companies will be forced to maintain reasonable prices with no government interference.

Supply Wrap-up, yo.

Demand Finalé, yo.

Choose one of the aspects of demand that we have studied in this unit thus far (listed above) and reflect upon an example of it in your life. Make a connection between what we have studied in class and what you personally experienced.

One of the aspects of demand that I can easily connect to my life is the difference between elastic and inelastic demand. Since I work now, I have my own money and I get to decide what to spend it on. However, I have a minimum wage job so my funds are limited and I have to pick and choose what I spend my money on. Most of the things I buy, I have elastic demand for. Since I mostly buy clothes and shoes, it is easy to stop when the prices go up, I run out of money, and no longer have a demand for them. 

An example of inelastic demand in my life is my need for gas. Basically I buy gas no matter what, because it is something I constantly need. No matter how much the price changes, I will still buy it because I need it to get to school every day. My parents actually gave me a gas card and they pay for my gas, so I don't have to alter my spending in order to be able to afford gas. This makes me wonder if I would spend less money elsewhere or not drive as much if my parents didn't pay for my gas.

Demand Wrap-up, yo.

Inelastic vs. Elastic, yo.

Headings, yo.

Complementary Demand: Katy Perry is photographed eating a hot dog, sales on buns and condiments increases.

Substitute Demand: Prices on Coke triple; sales in Pepsi increase rapidly.

Elastic Demand: As prices on toys increase, children are forced to be more inventive with the materials they already own.

Inelastic Demand: Diaper prices shoot through the roof, much to the dismay of helpless young parents.

Many consumers are stressing over the recent jump in diaper prices. However, since there is no substitute for diapers, there is nothing young parents can do about this. One woman complains, "I don't understand why the prices must shoot up. It simply makes things harder for young parents who are already struggling financially and have no choice but to buy the product." Other parents are equally as dismayed. Many are concerned over what this will do to struggling parents, who may have to give up other less important necessities in order to be able to afford the diapers. Although less important, these other products increase the quality of life; without them it is doubtful that the children will have as good an upbringing. The moral of this story is that companies should think about the effects their increase in price levels will have on the quality of human life. 

Demand, yo.

This is the url for the image of the shoes.