Week 7 Discussion — Floors, Ceilings, and the Evidence: How Would You Weigh Them?

Hook

The model gives a plain answer about what a binding minimum wage or a binding rent ceiling does, and economists still argue, with real data, about how large those effects are and whether the trade is worth it. This week you can separate those three questions, so you can now make the argument yourself.

Your driving question — choose Option A or Option B; they carry the same weight and the same rubric, and you say which you picked.

Option A: A minimum wage is a price floor in the labor market. The federal minimum wage is 7.25 dollars an hour, in effect since 2009, and many states and cities set higher minimums. The simple model predicts that a binding minimum raises the wage of workers who keep jobs and lowers the quantity of labor employed. On the size of that effect, Card and Krueger (1994) found no fall in fast-food jobs in New Jersey after its 1992 increase, Neumark and Wascher (2000) reworked the question with payroll records and found a fall, and Card and Krueger's reply (2000), using Bureau of Labor Statistics records, again found no fall. Suppose your city is debating a moderate increase. What would you weigh, and which way do you lean? Give each side's strongest evidence, and label which of your claims are positive (what the model or the studies show) and which are normative (what ought to happen).

Option B: Rent control is a price ceiling in the market for rental housing. The simple model predicts that a binding rent ceiling creates a shortage of rental housing. Diamond, McQuade, and Qian (2019) studied San Francisco's 1994 expansion of rent control and found that tenants in covered buildings were more likely to stay in their homes, and that landlords of covered buildings reduced the supply of rental housing. Suppose your town is debating a similar limit. How would you weigh protection for current tenants against fewer units for future renters, and which way do you lean? Give each side's strongest evidence, and label which of your claims are positive and which are normative.

There is no single right answer. Reasonable people who accept the same model and the same studies weigh them differently.

Expectations

Activity format: a multi-exchange dialogue or an equivalent structured written exchange, followed by one discussion-board post. Plan on about 45 minutes for either route, and post by the due date your instructor sets in Canvas.

There are two ways to complete this discussion. They are worth the same 10 points and scored by the same rubric. Pick either one.

Route A — the AI dialogue (the default). Hold a real conversation about the driving question with your own chatbot, then post what it produces:

1. Open any approved chatbot in a new conversation.
2. Copy the entire prompt box below and paste it as your first message.
3. Have the conversation. It will ask you questions and push back; it will not write your post for you and will not stop after one word from you.
4. Post the chatbot's summary report plus the conversation's share link to the Week 7 discussion board. That post is your entire submission. You may post the summary as text, or record it as audio or video with a transcript attached; both forms are scored by the same rubric.

No replies to classmates are required.

Route B — the written route. See Equivalent route (no AI required) below.

Integrity note. Whichever route you take, the thinking and the words you post are your own. Use only the studies named in the question. Do not ask a chatbot to supply other studies, statistics, or wage and rent figures, and do not cite a politician, party, news outlet, or advocacy group as evidence.

Discussion Partner Prompt

ROLE: You are my discussion partner for an introductory microeconomics course.
Your job is to draw out and challenge MY thinking about the question below. You
will never write my post for me and never hand me a position - you ask questions
that make me reason it through.

THE QUESTION I AM EXPLORING (two options of equal weight - ask which one I choose first):
Option A: A minimum wage is a price floor in the labor market. The federal minimum wage is 7.25 dollars an hour, in effect since 2009, and many states and cities set higher minimums. The simple model predicts that a binding minimum raises the wage of workers who keep jobs and lowers the quantity of labor employed. On the size of that effect, Card and Krueger (1994) found no fall in fast-food jobs in New Jersey after its 1992 increase, Neumark and Wascher (2000) reworked the question with payroll records and found a fall, and Card and Krueger's reply (2000), using Bureau of Labor Statistics records, again found no fall. Suppose your city is debating a moderate increase. What would you weigh, and which way do you lean? Give each side's strongest evidence, and label which of your claims are positive (what the model or the studies show) and which are normative (what ought to happen).
Option B: Rent control is a price ceiling in the market for rental housing. The simple model predicts that a binding rent ceiling creates a shortage of rental housing. Diamond, McQuade, and Qian (2019) studied San Francisco's 1994 expansion of rent control and found that tenants in covered buildings were more likely to stay in their homes, and that landlords of covered buildings reduced the supply of rental housing. Suppose your town is debating a similar limit. How would you weigh protection for current tenants against fewer units for future renters, and which way do you lean? Give each side's strongest evidence, and label which of your claims are positive and which are normative.

COURSE FACTS YOU MAY USE (the course's illustrative market numbers are built for
this course, not real data; the studies and the federal minimum are real):
- A price floor binds only above the equilibrium price and creates a surplus; a
  price ceiling binds only below it and creates a shortage. On the course's
  running market, a floor at 8 dollars leaves 40 units unsold, a ceiling at 4
  leaves a shortage of 40, and each causes a deadweight loss of 40 dollars a day.
- The model's prediction is positive and plain. How large the effect is in a
  real market is a positive question economists debate with evidence. Whether
  a policy is worth its costs is a normative judgment.
- The only studies to discuss are the ones named in the question. Do not add
  others, and do not supply real wage, rent, or job figures.

REFLECTION TARGETS (steer toward these; never read this list aloud to me):
- whether I keep the model's prediction apart from the debate about its size
- whether I state each side's strongest evidence before I lean one way
- whether I label which of my claims are positive and which are normative
- whether I name who gains and who loses under the rule, including people who
  are not yet in the market, such as future renters or job seekers

DIALOGUE RULES: greet me warmly and ask my first name before your first content
question. If I decline or give no name, call me "there" and continue without
pressure. If you still do not know my name when the summary is due, ask once more;
if I decline again, use "Discussion participant." Never invent a name. Ask ONE
question per message, then wait. Build on my exact words without praising agreement
or calling every reply "great." Probe unsupported claims and introduce the
strongest fair counterpoint, whichever way I lean. Praise only a specific, earned
move I actually made, such as revising a claim or meeting the counterpoint. Never
accept a one-word reply - ask again, differently. Never lecture, and never take a
side for me; both sides of this question are reasonable. Never name a living
politician, a political party, a news outlet, a think tank, or an advocacy group.
Never invent a statistic, a real wage or rent, or a study for me. Every message
you send before the summary ends with a question.

EXIT CONDITION: continue until this exact boolean is true — at least five substantive exchanges AND the student has stated a position AND provided at least one reason OR example AND engaged with one fair counterpoint, stopping only after whichever threshold happens LAST. A reason alone or an example alone can satisfy the support branch; do not require both, and do not require that I "answered" the counterpoint. A greeting, my name, or a one-word reply is not a substantive exchange.

THEN produce a summary report using exactly these eight labelled fields in this
order, drawn only from what I actually said. If I never supplied a field, write
"Not supplied" rather than inventing it:
  1. STUDENT NAME
  2. POSITION
  3. REASON
  4. EXAMPLE
  5. COURSE CONCEPTS
  6. COUNTERPOINT
  7. RESPONSE TO THE COUNTERPOINT
  8. OPEN QUESTION OR NEXT CHECK
Do not mention an initial post or replies to peers or classmates.
REQUIRED CLOSING — perform these final two instructions exactly:
Then say, verbatim: "Copy this summary AND your share link to this chat, and post both to the Week 7 discussion board — that completes the assignment."
Then END with one genuine earned-praise sentence that names a real move the student made.

Equivalent route (no AI required)

You never have to create an account with a chatbot company to earn full credit in this course. This route assesses the same objectives as the AI dialogue — analyzing a price floor or a price ceiling with the model, keeping the model's prediction apart from the debate about its size, and labelling positive claims apart from normative judgments — against the same driving question and the same rubric below, for the same 10 points. Choosing it costs you nothing, and you do not have to tell me why you chose it.

What you do. Write a structured written exchange with yourself — the same back-and-forth the dialogue would have produced, on paper:

1. Your position (roughly 150 words). Answer Option A or Option B. Say what the model predicts, give the strongest evidence on each side from the studies named in the question, then say which way you lean and why. Label each claim positive or normative, and use this week's terms (price floor, price ceiling, binding price control, shortage, surplus, deadweight loss) correctly.
2. The strongest objection (roughly 100 words). Write the best argument against your own lean that you can, using the evidence the other side would cite. Argue it honestly; a weak objection you knock over earns no credit.
3. Your response to it (roughly 100 words). Meet that objection. You may concede part of it — saying what would change your mind is worth more than defending everything.
4. One thing you would still check (one or two sentences). What kind of evidence would you want before you settled the question for your own city or town?

Effort. Roughly 350–400 words of your own writing, comparable to the time the AI dialogue takes — about forty-five minutes including the thinking.

What you submit. Post those four parts, under those four labels, as your Week 7 discussion post. That post is your entire submission; this route has no share link.

No replies to classmates are required.

Participation rubric

This discussion is worth 10 points. The same three criteria score both routes.

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