Bell Ringer #10 – 10/25/101.What economic

conditions create a “shortage”?

2.What occurs when the quantity supplied exceeds the demand for a good?

3.Define “productivity”.

Managing PricesTo protect consumers & producers from dramatic price swings, governments often sets prices.

Price Ceiling – establishes a maximum price for a particular good. Ex: rent control for apartments.

Price Floor – establishes a minimum price. Ex: base price for corn should guarantee some income for farmers.

Minimum WageBy federal law, minimum wage is the lowest amount an employer legally can pay a worker for a job.

Sometimes the # of workers exceeds the # of available jobs. This creates competition and workers are more willing to take a lower wage.

Fed Min Wage = $7.25Illinois Min Wage = $8.25

HomeworkRead Ch 5, Sn 3 – “Managing Prices”

Answer questions 1 & 3 on page 112.

Due on Wednesday