Select an article in a newspaper or magazine that discusses an American government policy on goods or services. Analyze the situation and write an articulate and informative paper containing the following:
Summarize the article using at least three economic terms and theories.
Identify the impact of the policy on demand or supply of the good(s) or service(s). Discuss the change(s).
Draw a supply and demand graph to explain this change. Be sure to label your graph and clearly indicate the change of the curve. (Sample shown below in #4)
Review Information below to help you write the report. It discusses all terms needed and economic theories that can be researched further.
Report should be 3-4 pages long (not including title & reference), 12 point Times New Roman APA Format citations with at least three references.
Review below terms:
Price elasticity of demand.
price elasticity of supply
Government Price controls
Price ceiling - The irony surrounding a price ceiling policy is that the policy, while aimed at helping people, actually excludes some people from getting the good or service at such an artificially low price.
price floor - common examples of these are rent control laws that determine the maximum amount a landlord can charge a renter for housing and minimum wage laws that determine the lowest wage a business is allowed to pay its employees.
In addition to price controls, the government can also impact supply and demand in a market through taxes. Taxes are a means of revenue for all levels of government. A tax is a burden that people in an economy must bear, but all taxes are not the same.
The term tax incidence refers to how a particular tax is distributed on the people who make up the economy.
The concepts of supply, demand and elasticity provide natural equilibrium in the marketplace. However, when government policies are introduced we see that the natural equilibrium becomes distorted and market inefficiencies result.