Assignment:
1-One of the first things mentioned in the video is that a person wants is unlimited, however there needs are limited to the resources available. Meaning that there is a difference between what a person wants and what a person needs. Now another thing that is highlighted in the video and is one of the first things you read about in our reading material, is the question of what to produce? Whom to produce? and how much to produce? I found this very odd since I thought very little in the meaning of these questions when I first read over them however they are repeated again, word by word, in a video that is produced by a completely different organization.
The environment in which we do business is mentioned in this video as the market. The market consist of consumers, business, the government, and other nations. When one organization makes an impact to the market, and other organizations should be effected in someway or another. The supply and demand process is again mentioned in this video, and the balance of supply and demand created the market equilibrium. Market equilibrium is the fair price to the consumer and the seller based of the balance of supply and demand. The demand curve is also analyzed and how quantities of an item can affect the overall price. Similar items such as butter and margarine will have a reverse effect; the price of butter raises reducing demand in butter yet the demand of margarine increases. However items that require resupply items will have similar effects. Increase the demand for color printers will increase the demand of ink cartridges.
The video provides a lot more information, such as taxes that affect supply and demand, or other government interventions that affect the market. However I want to give everyone else the opportunity to watch and comment on this video. Also don't want to make this post too lengthy thus reducing the desire to read the whole thing.
2-Price ceiling and price floor are effects of government intervention on the market. Price ceiling occurs when the government wants to hold prices down and limits the max cost of an item, service, or real estate. The more common examples of price ceiling occurs in real estate and property. Rent control is an example provided by this week's reading material that presents examples of price ceiling. Rent control was imposed by Paris after WWII designed for returning veterans. However because of the limits set by price ceiling, the housing market was unable to expand with the concepts of supply and demand. Instead of building new housing units which would have decreased the overall rent, landlords referred to briberies such the demand was still greater than the supply.
Price floors are the opposite of price ceiling, and occurs when the government sets limits on how low a product, service, or property can be. This usually happens when there is an excess of supply. The most common and still discussed price flooring is minimum wage. The government sets the minimum price that an employer can pay an employee no matter how easy it would be to replace that employee. Just because the employee is going to be paid at a higher rate, doesn't necessarily mean that the unemployment rate is going to go down. Many companies now actually outsource there services to other countries because of the cost of employment in the U.S. This only adds to the impact of unemployment. Anyways, I actually don't really have a biased opinion on the whole minimum wage issue but was just throwing some facts that relates to the supply and demand concept.