ECONS 101 – 1st Edition Lecture 9 Outline of Last Lecture I. Change in Quantity Demanded or SuppliedII. Surpluses and ShortagesOutline of Current Lecture I. Consumer & Producer SurplusCurrent LecturePrice Controls: legal restrictions on how high or low a market price may go.- Price Ceiling: requiring a price below equilibrium (Aid Buyers/Consumers)- Price Floor: requiring a price about equilibrium (Aid Sellers/Producers)Consumers should be allowed to make their own choices because:- The government can’t know what’s best for us.- The government can’t be trusted to act in our best interests.o We’ve already seen government situations where advantage is being taken: how can we trust them to do what’s best for US, not best for THEM.- If government intervenes, there WILL BE costs.- The government could come in and take over markets.o Back in the days when the government and educated beings had monopolies on markets and products.Government should help consumers make choices because:- Some decisions are very complex and individuals don’t have enough information.- If an individual behavior benefits the larger society, the government should encourage that behavior.o Has the power to influence and reward beneficial behaviors. Think: Student Loans (this allows for more variety in the schooling system,not just the rich and the elite.)- Government should be there as guides, and information givers.Government intervention in the market: - Price ControlsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o Economic efficiency says nothing about equity:o In competitive markets there are: Producers that want a higher price. Consumers that want a lower