On the theory of production and its implication to public policy.
Elasticity, Supply & Demand, and Government Policies
07 September 2015
The impact of government policies on economy can be understood by explaining two aspects: price control and taxation. The basic principle of microeconomics relevant to explain this is elasticity, how supply and demand curves respond to different levels of price and income. Students of public policy should understand these concepts not only by exercising calculations, drawing graphs, and interpreting economic statistics. But, most importantly, they should understand the fundamental logic behind each concepts, practical examples, and policy consequences.