How price ceilings affect market outcomes. Chapter 6 Supply, demand and government policies. Do drug bans increase or decrease drug-related crime?. Why did OPEC fail to keep the price of oil high?. Can good news for farming be bad news for farmers?. Three applications of supply, demand and elasticity. Computing the price elasticity of supply. Elasticity and total revenue along a linear demand curve. Total revenue and the price elasticity of demand. FYI: The midpoint method: A better way to calculate percentage changes and elasticities. Computing the price elasticity of demand. The price elasticity of demand and its determinants. Chapter 5 Elasticity and its application. In the news: Mother Nature shifts the supply curve. Conclusion: How prices allocate resources. Three steps for analysing changes in equilibrium. The supply curve: The relationship between price and quantity supplied. Case study: Two ways to reduce the quantity of smoking demanded. Case study: Are smartphones and tablets substitutes or complements?. The demand curve: The relationship between price and quantity demanded. Chapter 4 The market forces of supply and demand. Part 2 Supply and demand I: How markets work. In the news: Who has a comparative advantage in slaying ogres?. Should Australia trade with other countries?. FYI: The legacy of Adam Smith and David Ricardo. Opportunity cost and comparative advantage. Chapter 3 Interdependence and the gains from trade. Graphs of two variables: The coordinate system. Why economists' advice is not always followed. Our second model: The production possibilities frontier. Our first model: The circular-flow diagram. The scientific method: Observation, theory and more observation. Principle 10: Society faces a short-term trade-off between inflation and unemployment. Principle 9: Prices rise when the government prints too much money. Principle 7: Governments can sometimes improve market outcomes. Principle 6: Markets are usually a good way to organise economic activity. Principle 5: Trade can make everyone better off. Case study: Choosing when the stork comes. Principle 4: People respond to incentives. Principle 3: Rational people think at the margin. Principle 2: The cost of something is what you give up to get it.
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