The government in Venezuela is setting price ceilings on food. Their intent for doing this was to help make items more affordable for the poor, but it has some what backfired. When setting a price ceiling on items, those producers start to produce less or maybe even close their business down because they are hardly making a profit. This then makes those items even more scarce and harder to get, for both the rich and the poor. Price ceilings are not always helpful.
If a price ceiling was imposed on the water after the hurricanes, it could have done more bad than good. While price ceilings are imposed to help people save money, there can also be a downside to them. Those selling the water might then decide to lower the amount supplied because they are not going to make as great of a profit. The demand would still be high because everyone needed bottled water. With the supply lower, some will not be able to get bottled water. Fairness comes into play because these people needed bottled water, but the suppliers also need to make a profit of some sort. It is hard to say which way to go, because you can’t predict the future.
The increase of the federal minimum wage has been a long debate. Increasing the price floor, minimum wage, can have multiple affects. As described in the article, increasing the minimum wage would great for close to 17 million people. The downside to a price floor on wages is that people also loose jobs. Employers may layoff more employees because they can’t afford as many at the new wage. The debate is what increase amount is best for all? Also, does the small amount of jobs lost compared to the amount of people who get raises outweigh each other?
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