Mankiw, G. (2018). Brief principles of macroeconomics. (8th ed.). Cengage. ISBN: 9781337802154
ResourcesRead/review the following resources for this activity:
- Textbook: Chapter 6
- Videos: Chapter 6 (in Weekly Resources)
- Minimum of 1 library resource for initial post
In this discussion, you will apply what you have learned in Chapter 6 to real-world situations in order to see how the concepts can be applied to a very broad range of situations.
Keep in mind that throughout this course, discussions are intended to bring real-world situations to the course material that we are covering each week. Part of your grade will depend on the connections you make between the article or scenario in each discussion, the material from the chapters we covered in the week, and, when applicable, your own experience.
Initial Post Instructions
Find an example of a governmental price control—either current or historic is fine. This could be a price ceiling or floor, quotas, anti-gouging laws, or other such policies. Summarize the policy. Then, explain how the policy affects the market outcome—is the price higher or lower with the policy than it would have been without the policy? What about the quantity of transactions? What other effects are there? Is there anything the government has to do in order to support the policy (other than putting the policy in place)–in other words, does the government have to take steps to ‘correct’ the surplus or shortage? What steps are those?
Who gains and who loses because of the policy? Can this help explain why the policy was enacted? Why might the government or society want the policy in place rather than letting the market decide on the price of the good or the amount of transactions that take place? Is the policy good or bad? How is it helpful and how is it harmful?
Don’t forget to cite your article!
Secondary Post Instructions
For the article and post to which you are replying, extend the conversation—do you see other effects of this policy, other participants helped or harmed by the policy, or other necessary actions the government has to take in order to support the policy? Do you see other reasons for the policy to be in place? Do you see other harmful effects of the policy?
Are there other policies that are similar to the particular policy your classmate described and analyzed? Are there other ways to get the benefits of the policy without the harmful effects? (Note: that might be a particularly difficult question to answer, but if you can think of something, feel free to share!)
- In addition to one initial post, respond to at least two peers.
- Initial Post Length: minimum of 250 words
- Secondary Post Length: minimum of 200 words per post
- Use APA format for in-text citations and list of references.
Chapter 6After covering this chapter, students will be able to:
- Define Price Ceilings and Price Floors and illustrate how they affect markets.
- Show how a Tax affects market outcomes.
- Determine who pays what portion of a tax.
- How taxes affect the business environment.
- Cover Chapter 6.1 (we will cover 6.2 next week)
Price Floors, Price Ceilings, Binding versus Non-binding
the rubric is attached