Wednesday, November 18, 2009

Only in Economics Are Floors Above Ceilings

Alex Tabarrok:
Only in economics are floors above ceilings! It might be better to say "a minimum allowed price above the market price" and "a maximum allowed price below the market price," although that is a bit of a mouthful. I find that the floors and ceilings language does work, however, if the instructor explicitly points out the oddity of floors above ceilings! In that case, students find the distinction memorable.

1 comment:

Ali Hasanain said...

Also, if you look at these in isolation from each other, they make a lot of sense.

For students who're just going to memorize the labels for their final exams, these terms are a problem. For those who want to go the extra step of actually understanding the concepts, they are right on.