经济学原理 Chapter 4.pptVIP

Chapter 4 The Market Force of Demand The Market Forces of Supply and Demand The Market Forces of Supply and Demand When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country. Case study2 ways to reduce the quantity of smoking demanded Public policymakers often want to reduce the amount that people smoke. There are two ways that policy can attempt to achieve this goal. One way to reduce smoking is to shift the demand curve for cigarettes and other tobacco products. Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at reducing the quantity of cigarettes demanded at any given price. If successful, these policies shift the demand curve for cigarettes to the left. Case study continue…. Alternatively, policymakers can try to raise the price of cigarettes. If the government taxes the manufacture of cigarettes, for example, cigarette companies pass much of this tax on to consumers in the form of higher prices. A higher price encourages smokers to reduce the amount of cigarettes they smoke. In this case, the reduced amount of smoking does not represent a shift in the demand curve. Instead, it represents a movement along the same demand curve to a point with a higher price and lower quantity. Reaction of Smokers How much does the amount of smoking respond to changes in the price of cigarettes? Economists have attempted to answer this question by studying what happens when the tax on cigarettes changes. 10 percent increase in the price causes a 4 percent reduction in the quantity demanded. A 10 percent increase in the price causes a 12 percent drop in teenage smoking. Tobacco MarijuanaComplements or Substitutes How the price of cigarettes affects the demand for illicit drugs, such as marijuana? Opponents of cigarette taxes argue that tobacco and marijuana are substitutes, so that high cigarette prices encourage ma