Econ. Nov 20 by Peter Melkonian

1 of 29

Slide Notes

Econ. Nov 20

Published on Nov 27, 2015

No Description

View Outline

PRESENTATION OUTLINE

Government Intervention

Mr. Melkonian

Photo by wbeem

supply and demand is great!

naturally takes care of a lot of market issues

Photo by EmsiProduction

mostly done without any intervention

Photo by Graffiti Land

governments are heavily involved

why?

Photo by colorblindPICASO

Government involvement

Ceiling price
Floor price
Subsidy/Quota

ceiling price

restriction placed by government when they think price is too high

Photo by Stuck in Customs

generally done since govt. feels

expense is a hardship

Photo by renaissancechambara

government caps the price

but people want more.... result?

Photo by ATIS547

if ceiling price is below equilibrium

shortage

Photo by Wonderlane

10.

outcomes?

Photo by sicamp

11.

long line-ups

due to shortage

Photo by Kalexanderson

12.

black market

buy as much as possible - sell for higher for those who couldn't get it

Photo by Sukanto Debnath

13.

product quality suffers

sellers reduce costs to make money - rental units

Photo by Peter Kudlacz

14.

floor price

restricts price from falling below a certain level

Photo by ecstaticist

15.

generally done because govt. feels

x industry doesn't make enough money

Photo by ShutterRunner

16.

government makes product more expensive

but people aren't willing to pay that much - result?

Photo by Torben Bjørn Hansen

17.

celing price is above equilibrium

surplus

Photo by Locator

18.

consequence?

Photo by marsmet462

19.

we have lots of stuff!

now what...

20.

government buys surplus

sold, donated, turned into something else

Photo by ell brown

21.

subsidies and quotas

Photo by CANEurope

22.

subsidies

grant of money given to a particular inudstry

Photo by mynameisharsha

23.

more supply

since they have more money

Photo by Fall in Style

24.

new equilibrium price

cheaper for the consumer

Photo by Theen ...

25.

sellers get extra revenue too!

Photo by Juliana Coutinho

26.

quota

restriction placed on amount producer is allowed to make

Photo by UNDP in Europe and Central Asia

27.

marketing boards decide this

composed of government reps.

Photo by ajagendorf25

28.

shift in supply to left

what happens?

Photo by out of ideas

29.

pg 112-113 #1-3

114 #1