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Economics Lecture Four (view source)
Revision as of 23:49, September 18, 2009
, 23:49, September 18, 2009added interesting question
{{Economics_Lectures}}
{{Economics_Lectures}}
Lectures Two and Three we discussed how a government price control, or price ceiling, results in shortages. For example, government controls on the cost of medical services will cause a shortage of medical services, and then rationing of medical care to manage the shortage.
But here is a question: why doesn't the government simply order people to provide the services, so there is no shortage? If government is going to set the price, why doesn't it increase the supply by telling people to provide more of the services at the lower price?
Think about it. The answer is in this footnote.<ref>The Thirteenth Amendment to the Constitution prohibits government from ordering people to work.</ref>
In this course we have covered the supply and demand curves, and examined the economic concept of “elasticity”. Now we turn to focus solely on “demand”.
In this course we have covered the supply and demand curves, and examined the economic concept of “elasticity”. Now we turn to focus solely on “demand”.
[[Image:IndifferenceCurve2.gif]]
[[Image:IndifferenceCurve2.gif]]
== References ==
<references/>
[[Category:Economics lectures]]
[[Category:Economics lectures]]
{{DEFAULTSORT: Economics Lecture 04}}
{{DEFAULTSORT: Economics Lecture 04}}