Taking his name tag off Yellow?

Hello everybody.

Iggy! Do I need to move your name?” said Ms. Schulberger.

Iggy was surprised. Moving his name meant taking his name

tag off Yellow, where everyone was at the beginning of the day,

and putting it down to Orange or —no!—even Red. It meant he had

done something bad. But what? Was it the yelling?

I can't figure out taking his name tag off Yellow?

Yellow is capital, why?

The teacher sticks the students' name tag in a yellow part and if they make a bad mistake, their name tags will move to orange or red part, am I right?

Thanks ??