This document discusses price controls and microeconomics concepts. It begins with questions about what happens when a price floor is imposed above the equilibrium price or a price ceiling is imposed below the equilibrium price. It then explains that a price ceiling creates a shortage while a price floor creates a surplus. The document also notes that reductions in supply can lead to higher prices, not shortages, and that prices contain more information than quantities alone.

2. Microeconomics

3. Opening
Prayer

4. Quiz
1. What happens if you impose a
price
fl
oor above equilibrium?
2. What happens if you impose a
price ceiling below equilibrium?

5. Price
Supply
Demand
Market Price
Quantity
Price Controls - Ceiling
QD = Qs
Qm
Maximum
Ceiling
Controlled Price
Qd
Qs
Shortage

6. Price
Supply
Demand
Market Price
Quantity
Price Controls - Floors
QD = Qs
Qm
Minimum
Floor
Controlled Price
Qd Qs
Surplus

7. If the government controls
the maximum price you can
charge, what can you do?

8. Reductions in Supply create
higher prices, not shortages.
Chart

9. If the government controls
the minimum price you can
charge, what can you do?

11. Prices contain more
information than
quantities

12. Price
Information
Incentive

14. If you thought the price was
going to be higher
tomorrow, what would you
do today?

15. If we're running out of
something what should you
do today?

16. Contract today for a sale in
the future

17. Oil Price
$75.14