Big Question Over the last couple years, gas has gotten more and more expensive. How can we stop gas from getting too expensive?

Big Question Why doesn’t the government just say the price can’t get any higher?

Price Ceiling When the government sets a maximum (top) price.

What would happen if the max price/ceiling was too low? Buyers would be happy because price was low! Sellers would be sad because price was low.

What would happen if the max price/ceiling was too low? More demand than supply. What do we call this? Shortage!

Price Ceiling = Shortage

What happens when there is a shortage? Make people wait in lines Ration (each person only gets a certain amount) Favoritism (pick who gets it)

What happens when there is a shortage? Black Markets rise up

Big Question Should we raise the minimum wage in Virginia?

Price Floor When the government sets a minimum (bottom) price. E.g. Minimum Wage

What would happen if the minimum wage/floor was too high? Workers would be happy because wage was high Employers would be sad because wage was high

What would happen if the minimum wage/floor was too high? More supply of labor than demand for labor. What do we call this? Surplus

Price Floor = Surplus

What happens when there is a surplus of labor? Unemployment

What happens when there is a surplus of labor? Black market for labor (illegal immigration)

Should we have a minimum wage at all?