Question

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Question 2
Using the information from Georgia's government and your economic knowledge, compose a two-to three-paragraph
email message to the governor's economic advisors that analyzes the economic impact of price controls. Your email
message should address these points:
Why does the government implement price controls? Be creative and come up with a specific example of the two
situations you listed in question 1.
• What types of goods or services do price controls cover? Tailor your response to the situation you are describing.
• Is this price control a price floor or a price ceiling?
• Who or what would benefit or be harmed by these price controls?
• Based on the overall benefit or harm to society and the economy, justify your opinion on whether the price control is
a benefit or hindrance to the economy.
Be sure to use proper grammar as well as a topic sentence and introductory and concluding statements.

Answer 1

Answer:

This is the sample answer

Explanation:

After a natural disaster, such as a major hurricane, there is increased demand for gasoline, lumber, bottled water, clothing, and other essential goods as people try to replace and rebuild what was lost. At the same time, the supply of these goods likely decreases because of disruptions to factories and transportation. Under normal market conditions, producers would raise their prices at the first sign of trouble, both to offset their own losses from the disaster and to obtain optimal profits.

However, people who have lost everything need to start rebuilding as soon as possible at a price they can afford to pay. The sooner the community is rebuilt and back to normal, the sooner the local economy will return to normal for both consumers and producers. For this reason, I think the government should introduce price ceilings on essential goods during a disaster. Many people would not be able to buy the goods they need without price ceilings. Although producers lose out on maximizing their profits, their actual losses are limited because they are allowed to raise prices to cover production and transportation costs driven up by the disaster.

Because citizens benefit so greatly from them, I think emergency price ceilings are beneficial to the economy as long as producers do not suffer significant losses from them.