Econ Ch. 6

Chapter 6 Focuses supply and demand policies. This chapter highlights the reasons between price ceiling and price floor. Price ceiling is the legal maximum price something can be and price floor is the legal minimum of how cheap something can be. Price ceiling and Price floor are regulated by the government to "fix" market outcomes. Having price ceiling and price floor is the governments way of helping the economy. Minimum wage and rent control are factors of the government regulating these outcomes. For example, rent control controls how much a house owner can charge his tenants. By imposing a maximum price the government allows people who are lower in society (poor) to have the availability to rent a house. This can be controversial because lower  rents can cause more people to move into the city. Having minimum wage laws is also controversial because they can cause certain groups of people to fall under the poverty line. Certain minimum wage levels can also cause higher drop out rates amongst teenaged students.