ELASTICITY AND GOV’T POLICIES AFFECTING MARKETS
● Price elasticity on demand – definition, what factors make a product price
elastic in demand
● Price elasticity on supply – definition, what factors make a product price
elastic in supply
● The relationship of price elasticity or inelasticity on the revenues derived if the
prices of the product changes (relationship with slope of demand and supply
curves to price elasticity of the product)
● Income elasticity
● Cross price elasticities
● The three applications at the end of the chapter are very important, especially
the application on illegal drugs.
● It is very applicable here in the Philippines. We are concentrating on the
supply side of the illegal drugs problem (even suspicions of EJK’s of poor drug
addicts mainly by identification of ‘whistleblowers’.).
● The general view of the drug problem is that it is a public health issue. Drug
addicts are sick and need help, and not be killed. They may have done some
violent deeds and crimes and therefore should be put in isolation (as partial
punishment) in a rehabilitation center. NOT BE KILLED period.
● The demand side of the illegal drug issue as the chapter maintains, is more
important because illegal drugs are highly inelastic in demand. Once you get
hooked, it is difficult to stop the addiction.
● So prevention – or working on the shifting demand of illegal drugs downwards
– in schools, in communities – providing basketball courts and such – are
more important than trying to cure drug addiction by EJK’s.
● Price elasticity on demand – definition, what factors make a product price
elastic in demand
● Price elasticity on supply – definition, what factors make a product price
elastic in supply
● The relationship of price elasticity or inelasticity on the revenues derived if the
prices of the product changes (relationship with slope of demand and supply
curves to price elasticity of the product)
● Income elasticity
● Cross price elasticities
● The three applications at the end of the chapter are very important, especially
the application on illegal drugs.
● It is very applicable here in the Philippines. We are concentrating on the
supply side of the illegal drugs problem (even suspicions of EJK’s of poor drug
addicts mainly by identification of ‘whistleblowers’.).
● The general view of the drug problem is that it is a public health issue. Drug
addicts are sick and need help, and not be killed. They may have done some
violent deeds and crimes and therefore should be put in isolation (as partial
punishment) in a rehabilitation center. NOT BE KILLED period.
● The demand side of the illegal drug issue as the chapter maintains, is more
important because illegal drugs are highly inelastic in demand. Once you get
hooked, it is difficult to stop the addiction.
● So prevention – or working on the shifting demand of illegal drugs downwards
– in schools, in communities – providing basketball courts and such – are
more important than trying to cure drug addiction by EJK’s.
