Minimum Wage

     I believe that there should be a federal minimum wage. If they were to have this minimum wage it should be raised to at least about $10 per hour. I we were to compare the minimum wage we have now to the minimum wage we had back in the 60's the purchasing power would be lower. The price of minimum wage has increased and so has the price of goods and services, but the goods and services prices have grown a lot more then the minimum wage, thus making the purchasing power lower. Minimum wage is good because there are some jobs that you could easily pay an employee $2 an hour, and not giving them the amount of money they need to survive. With federal minimum wage states would have to meet or be above it so working citizens can survive.

Price Floor

     I believe that the US Government should be allowed to have a price floor. A product such as a Ferrari cost a lot to make, thus the price of the car is high. People complain about the prices, and not much people have one because of the price, but if a price floor was directed towards a company the prices would have to be higher and the complaints wouldn't effect the company. A company such as Ferrari would be turning a profit year in and year out even with a price floor.

Price Ceilings

     I believe that the US government should not have price ceilings. Even though a price ceiling can help out a person in need, such as a poor person needing help with purchasing the necessary goods and services. In this system a business would not be able to produce a profit, because of the high demand and price ceiling imposed on the business. Also, this can create a shortage of a product.

Inelastic/Elastic Supply

Inelastic and Elastic Diagrams

Demand Wrap Up

Demand Schedule/Curve

Headlines

Complimentary Demand:  Coca Cola tries fitting in with the car manufacturing world, car sales skyrocket!
Substitute Demand:  Oil companies stop drilling, Electric car sales erupt!
Elastic Demand:  Candy prices are massive, people drop there crave for candy.
Inelastic Demand:  Milk prices double, people still find room in there gut to purchase.


Milk prices have reached an exceptionally big price, people are frustrated, but find room and suck it up. We see things like this happen all the time, but never so bad that prices have reached $10.00, this crazy amount has left customers with rosy red faces. These customers hate it but need the milk so they still buy it. I've caught up with a local farmer, Billy Joe Utter, he says the machinery and maintenance for the farmers and cows to produce the needed amount of milk is too expensive. In fact his exact words were, "Yup, ye' ol betsy (machine) is runnin' low on juice, plus ol' Gurty (prize winning milk producing cow) is getting old and runnin dry on her milk." Government officials say the price of the machines are increasing due to the small supply or iron, but is this all true or a publicity stunt? Many market analyst expect the price to soon stop its excruciating price increase and steady out, but until then people will be emptying their wallets on the well needed milk.

Demand Reflection

In the world today Elastic and Inelastic demand effect me in many ways. First I'll talk about elastic demand. An example of elastic demand is candy. People don't exactly need candy, this is a want and not a necessity. So if the price of such candy increases the demand drops drastically and the total revenue drops.

Second is Inelastic. Inelastic demand in more of a necessity compared to want. Such items include gas, milk, bread, etc. If you make a inelastic demand curve the line would be more vertical then horizontal (elastic). So as the price increases the demand may drop just a tad, but the total revenue will increase.

Learning more about demand makes me wonder how bad the economy is or if people are exaggerating there worries about the economy.