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Bell Ringer #11 – 10/26/10

Bell Ringer #11 – 10/26/10. Explain the difference between “price ceiling” and “price floor”. Why does the government set a “minimum wage”? What is the current minimum wage in Illinois?. What political connections can be seen to minimum wage from this map?. Rationing.

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Bell Ringer #11 – 10/26/10

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  1. Bell Ringer #11 – 10/26/10 • Explain the difference between “price ceiling” and “price floor”. • Why does the government set a “minimum wage”? • What is the current minimum wage in Illinois?

  2. What political connections can be seen to minimum wage from this map?

  3. Rationing • Rationing is when the government distributes products on the basis of policy decisions, rather than by supply/demand. • Gov’t rationed meat & butter during WWII. • College sports tickets – to ensure Ohio State students get access to affordable seats, a number of tix are rationed for them. Makes it harder for the rest of us!

  4. Rationing Medical Care? • Which is more valuable? To provide a $150,000 liver transplant for an ailing child? • Or to use that money for prenatal care that may enhance the life expectancy of fetuses being carried by 150 expectant mothers?

  5. Is rationing the only solution? • To most Americans, the either/or aspect of the baby question is morally repugnant -- surely the leader of the capitalist world can afford both? • A growing # of health experts argue that the U.S., in fact, no longer has the finances to provide unlimited medical treatment for all who need it. • Is the only solution to ration health care?

  6. 3 Consequences of Rationing • Can be unfair • Is expensive • Creates “black markets”

  7. Black Markets • A black market is the buying and selling of goods in violation of the law, typically at a higher price than has been officially established. • They develop because rationing does not satisfy consumer demand. • Ex: scalping tickets

  8. Homework Read Ch 5, Sn 3 – “Managing Prices” Answer questions 1 & 3 on page 112. Due on Wednesday

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