Web Links

Marginal URLs:

• p. 92: Go to http://www.tenant.net/ to learn more about New York City's rent controls from Tenant.net.
• p. 97: Go to http://www.dol.gov/esa/whd/flsa/ for information from the U.S. Department of Labor on recent developments concerning the federal minimum wage.

• Review the status of private water production at http://www.waterindustry.org/Water-Facts/water-costs-11.htm.
• Learn more about the results of privatization of the production of drinking water at http://rru.worldbank.org/. Click on "Public Policy Journal," type "Water Services in Chile" in the search box, and click on the link to the PDF document with this title.

The Floor on Milk Prices

At various times the U.S. government has established price floors for milk. This application gives you an opportunity to apply what you have learned in this chapter to a real-world issue.

Title: Northeast Dairy Compact Commission

Navigation: Go to http://www.dairycompact.org/ to visit the Web site of the Northeast Dairy Compact Commission.

Application: Read the contents and answer these questions.

1. Based on the government-set price control concepts discussed in Chapter 4, explain the Northeast Dairy Compact that was once in place in the northeastern United States.

2. Draw a diagram illustrating the supply of and demand for milk in the Northeast Dairy Compact and of the supply of and demand for milk outside of the Northeast Dairy Compact. Illustrate how the compact affected the quantities demanded and supplied for participants in the compact. In addition, show how this affected the market for milk produced by those producers outside the dairy compact.

3. Economists have found that while the Northeast Dairy Compact functioned, midwestern dairy farmers lost their dominance of milk production and sales. In light of your answer to Question 2, explain how this occurred.