Chapter 6: Supply, Demand and Government Intervention - Part 1 - price controls and taxes

Price ceilings 0:26
Binding vs nonbinding 1:31
Other rationing mechanisms 5:26
Impact of a price ceiling on consumer and producer surplus 15:11
Price floors 24:06
Binding vs nonbinding 24:30
Impact of a price floor on consumer and producer surplus 29:47
Alternatives to floors and ceilings 39:22

[@tiffanynorris1828]

My midterm exam is in one hour and Ive been watching these videos all night and day to try to learn something. My class is completely self taught. We are to just read the chapters and then take a quiz and then mid and final exams and these videos are really helping me understand.

[@drollette08]

The same here

[@sadsapxe2]

Same

[@shammaalshehhy7405]

same here

[@BinurZorbanova]

My midterm in 2 hours, and I’m not prepared, I hope this video will help😭

[@SriramGopinathan-p5b]

The best explanation given by any professor on economic topics

[@DrAzevedoEcon]

I'm happy to be able help!

[@haodayu2265]

All these scenarios should be considered under the assumption of perfect competition where: 1) neither the demand or the supply side has significant market power (no monopsony, monopoly, oligopoly, etc.) 2) all economic agents share information symmetry and commit rational economic decision-making (no information asymmetry) 3) a close close economy where there is no credit market emerged (no intertemporal decision-making) 4) market mechanisms succeed in efficiently allocating available resources (no market failures) Otherwise, great contents.

[@DrAzevedoEcon]

In an intermediate microeconomics class, we would certainly talk about all of these. In a principles class, I usually introduce some of these a little later. You don't need to worry about them to understand the basics of how a competitive market works.

[@juanaramirez8873]

love your videos! very straightforward, great way to review before exam.

[@abdisamadabuukar593]

My midterm is bad and I failed but teacher I understand some things of price ceiling and price floor and i want to say thank you teacher ❤

[@DrAzevedoEcon]

Sorry to hear about the disappointing grade. Hang in there and keep working at it.

[@stelmili]

Great videos! You make a valid argument regarding maximum and minimum prices, however it's based on the main assumptions that we often make about the economy (competition, rational choice, knowledge of the market) in order to make lessons simpler and easier, but the reality is much more complex, right? For example if we knew that suppliers in a market have supernormal profits, wouldn't a maximum price be a way to deal with the situation?

[@DrAzevedoEcon]

Reality is much more complex. If you're asking what the correct way to deal with a situation in which firms have market power, there may be an incentive for government to intervene to regulate the firms. Take a look at my video on Oligopolies...I discuss this.

[@farzanamim1829]

I love your videos they are awesome .. Can you please explain Open Economy in any video .

[@Raghad_258]

I appreciate your work❤️❤️

[@DrAzevedoEcon]

Thank you!

[@alonsosanchez8776]

You do really understand what you are talking about, thanks for all ❤

[@DrAzevedoEcon]

Glad to be able to help!

[@margotstewart8079]

You are my hero!

[@veronikalipovska2117]

Thank you for well delivered lectures. I have a question related to surplus. In one of the previous videos, and also in the definition I have found, the surplus is the diference between prices. Yet, here it is computed as area. If I understand it correctly, you compute the money that could have been gained in the society. Is there a double meaning to the term or is it just simplification to make the topic more digestible? Or am I missing something? Thank you in advance.

[@GEETIKA-yn7ls]

@ 24:05, why do we need to divide the area into three parts? what is that little triangular area for?...........for consumers that buy due to other rationing mechanism/consumers with less consumer surplus?

[@DrAzevedoEcon]

I'm not completely sure I understand the second part of your question. I'm dividing it up into areas so that I can show what consumer and producer surplus look like with and without the price floor (or ceiling). If you are actually calculating CS, PS and deadweight loss you would only divide it up into the areas necessary to calculate the area you are interested in. Which triangular area are you asking about?

[@GEETIKA-yn7ls]

@@DrAzevedoEcon thanks for the response! I am asking about the triangle that you make while dividing the area A into two parts so as to calculate consumer surplus. I did not understood why we are only considering the rectangular area to calc. CS and why also not including that little triangular area

[@varsitychannel2632]

It is for calculation purpose in case you are given numbers so you gonna use formulas of triangle to calculate that part and use formulas or areeectangle to calculate the rest.. I hope I have answered you

[@sabaghafoor1826]

Hello Sir where can I found your notes?

[@jameswu9715]

Hii professor, is there a way I can find your videos for chapter 8? I really need it.

[@DrAzevedoEcon]

I actually cover the deadweight loss of taxation in my video for chapter 6. kzbin.info/www/bejne/rH-7oX1jh7CgZtU

[@jameswu9715]

@@DrAzevedoEcon Yes professor , I realized that, thank you so muchhh🥺

[@sapnabaid3437]

Mankiw

[@krishnaagrawal1369]

where can i find the videos of ch 9 international trade

[@tanvirrafi5704]

Thank You Sir!

[@iambenmerino]

Hi Dr. Azevedo, ¿where can I find chapter 8?

[@sapnabaid3437]

Mankiw

[@fedichaabani1992]

Thank you for your explanations but still there is sthg I couldn't get. In the example u have stated which is about the minimum wage. Companies might want to use the price floor though there will be still be a surplus in jobs. So how can a minimum wage create unemployment ?

[@DrAzevedoEcon]

I'm not sure I understand your question. Any company is able to pay a wage higher than the minimum if they want (economists call this the 'efficiency wage'). An efficiency wage works like a minimum wage.....it creates a situation where the quantity demanded of labor is lower than the quantity supplied of labor....a surplus of labor....unemployment. None of that changes the fact that a minimum wage that is set above the equilibrium wage will cause quantity demanded to fall and quantity supplied to rise....in other words, it will create unemployment. Economists certainly disagree with each other as to how much unemployment is created...it depends on the elasticity of demand and supply (as well as other things that we don't discuss in a principles class).

[@fedichaabani1992]

@@DrAzevedoEcon Thank you! I didn't make the difference between the quantity of Labor and the number of Jobs. Surely a surplus of Labor can create unemployment but if we discuss a different product which would be a number of Jobs it would be a whole different case. The number of jobs would be the quantity demanded by a certain company. And the quantity supplied would be the quantity of Jobs people need. Still there would be a minimum wage , a surplus of quantity supplied, unemployment. I am not sure if what I am talking about is right. Thanks for the content you are providing.

[@stelmili]

We usually portray the labour market the other way around. Supply is the supply of working hands and demand is the demand for people to go and work. So a minimum price (price floor) over equilibrium causes a surplus of working hands-> unemployment. It works like that because people are getting paid wages in return for their time, same as a supplier is paid money in return for his goods or services.

[@ramashankar5183]

Sir kindly upload videos of ch 8,9 🥲.

[@Mansi_Saluja]

❤❤

[@DrAzevedoEcon]

👍

[@vivekjungpandey2507]

❤❤❤

[@GraysonShackelford]

does anyone understand how this board works… is bro just writing backwards?

[@4ever_Blessed]

😂😂

[@amritsarkar9674]

16:10

[@니모-b6w]

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