+ week 4 applications of demand and supply quote here…

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WEEK 4Applications of Demand and Supply

QUOTE HERE…

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+1. PUTTING DEMAND AND SUPPLY TO WORK

Learning Objectives

1. Learn how to apply the model of demand and supply to the behavior of equilibrium prices and output in a variety of markets.

2. Learn basic vocabulary on the organization of firms and explain how the model of demand and supply can be used to understand prices of shares of stock.

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+Personal Computer Shipments, Market Percentage Shares by Vendors, World and United States 2011

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+The Personal Computer Market

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+Increasing Demand for Crude Oil

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+The Impact of Higher Gasoline Prices

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+1.3 The Stock Market

• A sole proprietorship is a situation in which one individual owns a firm.

• A partnership is a situation in which several individuals own a firm.

• A corporation is a situation in which shareholders own stock in a firm.

• Corporate stocks are shares in the ownership of a corporation.

• A stock market is a set of institutions in which shares of stock are bought and sold.

• Retained earnings are profits not paid out in dividends.• Dividends are profits distributed to shareholders.

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+Demand and Supply in the Stock Market

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+A Change in Expectations Affects the Price of Corporate Stock

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+2. GOVERNMENT INTERVENTION IN MARKET PRICES: PRICE FLOORS AND PRICE CEILINGS

Learning Objectives

1. Use the model of demand and supply to explain what happens when the government imposes price floors or price ceilings.

2. Discuss the reasons why governments sometimes choose to control prices and the consequences of price control policies.

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+

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+Price Floors in Wheat Markets

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+Supply and Demand Shifts for Agricultural Products

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+2.2 Rental Price Ceilings

The purpose of rent control is to make rental units cheaper for tenants than they would otherwise be

Rent control is an example of a price ceiling Price ceiling a maximum allowable price

set below the equilibrium price.

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+ Effect of a Price Ceiling on the Market for Apartments

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+The Unintended Consequences of Rent Control

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+

3. THE MARKET FOR HEALTH-CARE SERVICES

Learning Objectives1. Use the model of demand and supply to explain

the effects of third-party payers on the health-care market and on health-care spending.

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+THE MARKET FOR HEALTH-CARE SERVICES

There has been much discussion over the past three decades about the health-care problem in the United States.

Much of this discussion has focused on rising spending for health care

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+Health -Care Spending as a Percentage of U.S. Output, 1960–2009

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+3.1 The Demand and Supply for Health Care

• To assess the market forces affecting health care, we will focus first on just one of these markets: the market for physician office visits.

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+Total Spending for Physician Office Visits

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+3.1 The Demand and Supply for Health Care

• A third party payer is an agent other than the seller or the buyer who pays part of the price of a good or service.

• Consumers use more than they would in the absence of third-party payers

• Providers are encouraged to supply more than they otherwise would.

• The result is increased total spending.

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+Total Spending for Physician Office Visits Covered by Insurance