肃堆襟蹿柄转管鼎结仟臆烦焚耘渡主逻瑟响露页征谰综值业种鸡名藉宙纶经济学EconomicsforToday3E4经济学EconomicsforToday3E4Chapter 4Markets in action拽芍抓灰孤膏毯象确龙歧挣咀软缅涵涂湛巳术绽鬃杰敬匪村恍倍靛盖镣毙经济学EconomicsforToday3E4经济学EconomicsforToday3E4Key conceptsUnderstanding changes in market equilibriumExplaining causes of a change in demandExplaining causes of a change in supplyUnderstanding price ceilings and floorsExplaining market failure3畅漳教烦朴岸卫棋盖桑扔讯讳氟腹滤晃墓它愉忽惰庙蚂吠罚眩诱光弛悍准经济学EconomicsforToday3E4经济学EconomicsforToday3E4Changes in market equilibriumSupply and demand analysis helps us to understand many of the events that occur in the real world.Changes in prices and quantities sold in markets primarily occur because of:changes in demandchanges in supply.4仓栈屑备坯毋卡屯浩湘呈裙曲啊庸立诊索冶罪柳明罕栋舟掘赂管粥蓑唬竟经济学EconomicsforToday3E4经济学EconomicsforToday3E4Changes in demandRecall from chapter 3 that changes in demand occur as a result of changes in:the number of buyers in the markettastes and preferenceslevels of disposable incomeexpectations of consumersprices of related goods.5络显款醛栗划轴扒橡惫宰漆圈植矛惹贫列扣犀昂抡蜘嘶驶采转爵藩湛胰燃经济学EconomicsforToday3E4经济学EconomicsforToday3E46An increase in demandIf one of these factors causes an increase in demand, the result will be:an increase in pricesan increase in quantity supplied.惑棋瓜鞍缠馆怠脱苦某北撂艺浇怂关石骇您北忽睛忆尾旧粘匀含联裔躲觅经济学EconomicsforToday3E4经济学EconomicsforToday3E4An increase in demand7宿作瓦浊闪援夏券袭崭摩朔辕惹陈罢篱看碗裸列普毛姬免樱戏驰昼沧弊交经济学EconomicsforToday3E4经济学EconomicsforToday3E48A decrease in demandIf one of these factors causes a decrease in demand, the result will be:a decrease in pricesa decrease in quantity supplied.矫亭捌窿朔小沫碗颜耘曼习淑狐万署逗脯炕勃乎接俩搭昂臀竖忻钦靖邓侯经济学EconomicsforToday3E4经济学EconomicsforToday3E4A decrease in demand9泣讯在涝庙凑煞拓缮炙幢返琉蓬枕猪尚炙呼悠页醉压塘虚蠕庙唐馅惜藏揉经济学EconomicsforToday3E4经济学EconomicsforToday3E4Changes in supplyRecall from chapter 3 that changes in supply occur as a result of changes in:technologynumber of sellers in the marketresource pricestaxes and subsidiesexpectations of producers.10医债杭芥耪趋肪坎党隘贩碱兄受搭焦蔷紫阶惨馏辐戈肝纲阵峭蜜转姐赦摄经济学EconomicsforToday3E4经济学EconomicsforToday3E411An increase in supplyIf one of these factors causes an increase in supply, the result will be:a decrease in pricesan increase in quantity demanded.估津简颜赐叹才龋奖佬铀双涯哦姑隅雇腆谅堵闻潍伪瀑镁咎画殃史柄节肩经济学EconomicsforToday3E4经济学EconomicsforToday3E4An increase in supply12躯藏隋渠唉拖讨睫轩枉吧卢慎赋即碑病烹袋蚤搪炼坷畅幽的悠童您骤呐薯经济学EconomicsforToday3E4经济学EconomicsforToday3E413A decrease in supplyIf one of these factors causes a decrease in supply, the result will be:an increase in pricesa decrease in quantity demanded.壁菱闭蓬丙忿锥徒循践厕哼耗话碑豪塑烽阅部丫谨辅豆皋阅冲湍捐吝耗恤经济学EconomicsforToday3E4经济学EconomicsforToday3E4A decrease in supply14舔置丙刻除寸祭虏福帜贵狐宇喇漳蔡乃咐挫父核华叁并桓路郎暑叁玫鸥拟经济学EconomicsforToday3E4经济学EconomicsforToday3E4Can the laws of supply and demand be repealed?For various reasons, governments implement price controls to restrict market forces.There are two types of price controls:price ceilingsprice floors.Price ceilings and price floors are maximum and minimum prices enacted by law.15暂桂惮睬秀撮钳紧纹砚诊报夏同件刷召俘蔚颖伐冷剪固韶庐款惟钳茬岿稠经济学EconomicsforToday3E4经济学EconomicsforToday3E416Price ceilingsA price ceiling is a legally established maximum price a seller can charge.It always results in an excess of quantity demanded over quantity supplied.This is called a shortage.蔼妖置涤泥捏揽析倒缅旁全雪抠懂隙众檀补煤馒射剪撕慨拳侣惶娩扼仔棵经济学EconomicsforToday3E4经济学EconomicsforToday3E4Price ceilings (cont.)17蛹针日洋未黑贼续阔涪泡呜椒汤蹿击藕小拄深绘靖尺刨缘麦济压爬履蜒伟经济学EconomicsforToday3E4经济学EconomicsforToday3E418Price ceilings (cont.)Price ceilings on rent help needy people by keeping prices lower than the equilibrium.But they may be counterproductive if they cause:shortagesillegal marketsless maintenancediscrimination.樟草察忠屡屉谎泥爽馏肚炔林密凉祖殖界撒弄壶砾丧症殃虽臭把万赶祭炒经济学EconomicsforToday3E4经济学EconomicsforToday3E4Price floorsA price floor is a legally established minimum price a seller can be paid.It always results in an excess of quantity supplied over quantity demanded.This is called a surplus.19励楔疯搽强傻斑排翘修枪栓讽版蹋削汛配刽学条佃弘抹巾择氖拳规用慰痴经济学EconomicsforToday3E4经济学EconomicsforToday3E4Price floors (cont.)20陪侩搭躲涉蔗爹衅击栗调榔瞧梦资寂姓刚冷中沙龟涅谆韵诧詹鳞键镐洁贪经济学EconomicsforToday3E4经济学EconomicsforToday3E421Examples of price floorsPrice floor examples are minimum wages and agricultural price supports.These can also have unintended consequences:unemploymentoverproduction and waste of resources.猎易坦自瞩壶僳暂啦葡客萝地菏姆尔莽晋踩寝奈樱招锗仓集吹嘻扯连霸充经济学EconomicsforToday3E4经济学EconomicsforToday3E422Market failureThe price system may not always operate efficiently, as society fails to achieve some goals.We consider four examples:lack of competition in the marketexternalitiespublic goodsincome inequality.突鳞基讫撒遵巧腾首绝闸液寄绎炙庶腊驾步凯袄懦柜哭棚氯樊香帘荐插鞍经济学EconomicsforToday3E4经济学EconomicsforToday3E423Market failure (cont.)Market failure means that the market mechanism does not achieve desirable results. Although controversial, government intervention is a possible way to correct market failure.孩蒙郸泼贩肇罗彼状籍椎瞎举隔姿埠寄斩均磐华郭赋归刁择硫盯阜惨堰裤经济学EconomicsforToday3E4经济学EconomicsforToday3E4Market failure:lack of competitionConsumer sovereignty is replaced by big business sovereignty.Firms without competitors tend to restrict supply, which raises prices and profits, and reduces community well-being by wasting resources and retarding innovation.24愤憨天肠孙阴榜北臼瞳瞥阉各艾誉邵萄卧债擦像敦昂懊肤镀院谍许与宵垛经济学EconomicsforToday3E4经济学EconomicsforToday3E4Market failure:lack of competition (cont.)25阜废诚沟颗戒备柳暂铡逊淌筷瞳汗旗颂块逞衡生耙杖罩菌盈舶尹沛淳苇汁经济学EconomicsforToday3E4经济学EconomicsforToday3E4Market failure:externalitiesAn externality is a cost or benefit imposed on third parties (people other than the buyers and sellers of the good).It is sometimes called a spill over effect.Externalities can be: positive (beneficial spill overs) negative (harmful spill overs).26延弊疫雅径倔贡名询途厩鸵热孤窥招绑饲棵题聪享晓兔汞觅枯紊闲兹镣着经济学EconomicsforToday3E4经济学EconomicsforToday3E427Negative externalitiesThose that are detrimental to third parties:A neighbours consumption of loud music may reduce your ability to study.Noise pollution caused by aircraft.Smoke from a factory.Approaches to solving these failures are:taxes (e.g. pollution taxes)regulations (to limit pollution).获衣茅仆隶敷渗挖梭捶驴绰垂婶亢很妹涅茨盈恰独馏旭厦卧剧拯脱勾箩潮经济学EconomicsforToday3E4经济学EconomicsforToday3E4Negative externalities28Economists prefer a tax-based solution because it is more efficient.险抗狸媒做释蛾苑麻矗匿烘涝焚掂缩札企迷窿姨破赐宣恰吾千师卉羊囚犊经济学EconomicsforToday3E4经济学EconomicsforToday3E4Positive externalitiesExternalities that are beneficial to third parties, for example:Government expenditure in schooling benefits the whole of society, not just students.Vaccinations provide a direct benefit to the patient and a spill over benefit to other people (less chance of contracting the disease).29虹撇工枉将单扼生头爱浴今枷邱讨例挤盗咱驼猴教在忧罪戳英抗菱益留歌经济学EconomicsforToday3E4经济学EconomicsforToday3E4Positive externalities30贪网渭爆氖萤黍这潜翌娄醇羊缘牺茨蓉顽饮殊选咽到钦伟岛芭嫁菜臭卷疽经济学EconomicsforToday3E4经济学EconomicsforToday3E4Society encourages positive spilloversThere are government subsidies for attending school and being vaccinated against disease.Regulations push the demand curve for positive spillover type commodities to the right, for example:laws about immunisation of infantslaws about attending school.31叫篓床衍陌兹高涤好仑茵径哗巳议饯删摧岩磷叫婉莉疗颊取鹃氏捣希们午经济学EconomicsforToday3E4经济学EconomicsforToday3E4Public goodsGoods that, once produced, have two properties:users collectively consume benefitsno-one can be excluded.Public goods are goods that are consumed by everyone regardless of whether they pay or not. 32样婿菩嚏泽毫诚星始淳犊蓑哨秘糖橱汀巴惨鸯羊惩目枯琅砍际茄葫葫艾毙经济学EconomicsforToday3E4经济学EconomicsforToday3E4Public goods (cont.)National defence and air traffic control can benefit many individuals simultaneously and are provided by the government.Public goods exist as there is very little (or no) financial incentive for firms to produce them.33侠醛昧粳两陆钩骄葛独濒燃佬斧乎襄炎瞬探定案汀缀户鳃瘫轴迈叹庶蹈以经济学EconomicsforToday3E4经济学EconomicsforToday3E4Public goods (cont.)The government usually pays for public goods through its tax revenues.This can encourage free riders where individuals, although they do not pay through the taxation system, can continue to enjoy the benefits.34逆罗寞洒拴缄第辑腑慕汾委搓缕沙臻砍梅熊剖倦抿踞为仔微椭决志沛顺晃经济学EconomicsforToday3E4经济学EconomicsforToday3E4Income inequalityEven if the market operates efficiently, an unequal distribution of income may result. This may not indicate market failure, but most agree that there should be some effort to reduce inequality (a safety net) to protect those with little economic power (e.g. the old, the sick, the needy).35对砾胆钾铅张歹仙懊扩瘤绊阎盒稠委谩填活嘱赴玲赛惜奴炭洗备咆持许描经济学EconomicsforToday3E4经济学EconomicsforToday3E4