Vazirligi toshkent moliya instituti

Используемые источники
1. https://www.questia.com/library/economics-and-business/economics/economic-
theory/microeconomics
Individual 2- Analysis for Home Prices in China
Home Price Gains in China
According to the article, Home Price Gains in China Cool, 7 September 2012 taken from the Star newspaper, it mentions that prices for newly construct homes in China rose in fewer cities in August than the previous month. It also mentions the policymakers will not make any policies to hold back the price of the house which indicate that they will let the price of the houses continue to increase. In order to build more houses, China has to find many resources to build houses but resources are never enough for everyone which will cause scarcity. There is not enough land to build many houses, so land has become a scarce resource. In order to overcome this problem, China might build more high-rise buildings such as apartments and condominiums. Apartment and condominiums used fewer spaces to build and it can save a lot of space and many people can stay in it. The suppliers will build more this kind of houses which save space and maximize profit. This will solve the scarcity of resources but will cause changes to the demand and supply market.
Because of the scarcity of the land, the buildings will be charged in a higher price. This leads to the law of demand. When other things remain the same, the higher the price of a good, the smaller is the quantity demanded for the goods whereas the lower price of a good, the larger the quantity demanded for it. As I know, this is common situation for everyone in the world which no one is willing to buy high price product due to different reasons, so when the price of a product is getting higher, the lesser the consumer purchase the product. In this case, China’s house price has risen; the demand for the houses will decrease. This is because the people in China might not have the ability to afford the houses with high prices. When the price of the good or service rises relative to income, people cannot afford all the things they previously bought, so the quantity demanded will decrease and this known as income effect. People might be able to afford a house in China with the income they have, but the price of the house has risen recently, so many people cannot afford it anymore. People’s demand for the houses has decrease. Although the demand for the houses in China now is decreasing, but there are some other factors that might change the demand such as expected future prices and income. If consumers expect future price will goes up, the demand for the current housing will be increased. If it is not, then the demand will remain decreasing. Demand for the houses is also influence by people’s income. When income has increases, people can afford the housing prices and they will buy the houses which will cause the demand for houses increased.


Besides the change in demand, supply will be affect too. The law of supply is about the higher the price of a good, the greater is the quality supplied. Suppliers of the houses in China will supply more houses because they can maximize their profits by selling the houses. Every supplier wants to maximize their profit, so when the price is higher they will supply more of the goods. There are also some factor will affect the changes in supply. For example, expected future prices will decrease the current supply of the house if the future price of the houses rises. Another factor will influence the supply is advanced in technology. Nowadays, technologies are getting advanced that increased the supply. Many suppliers will use high technology to produce their product and it lower the cost of producing existing products, so suppliers will increase the supply and sell in it a high price.


In addition, as China’s home price getting higher it will cause the problems such as surplus of the house and also housing shortage. If the price is too high, there will be a surplus which is the quantity supply exceeds the quantity demanded for the houses. There will be too many houses in the market but consumers cannot afford it and it will become waste resources. In other hand, there will be a housing shortage if the price is low. The quantity demanded for houses will exceeds the quantity supply by suppliers. There are many people want to buy houses if the housing price is lower than previous month, but this will cause shortage because there are too many people but the houses are just supplied a few by suppliers. Suppliers cannot maximize their profit in the lower price, so they will not supply more houses to the people. In order to solve this problem, China should make price adjustment. They should set the price where the buyer’s plans and sellers’ plans agree and the price does not change until some event changes either demand or supply. This is known
as market equilibrium. In equilibrium, demand equals to supply and everyone is happy with it. This will totally solve all the problems that mention above.


I believe that if the housing prices keep decreasing and the investment in it is steady, all the negative effect will not happened. In my opinion, government should set a price ceiling or also known as rent ceiling when applied to housing market. Price ceiling is a regulation that makes it illegal to charger a price higher than a specific level. Government should set the price lower which meets the equilibrium so that it can benefits the suppliers and also benefits the poor. While in equilibrium, all the buyers and sellers are happy with the business and it is suitable to do business.

Quantity q


In conclusion, there are many economics problem in this world. If all parties corporate with each other, problems will be solve easily. In China, there are many people who are poor; the policymakers should make some policies to control the housing price, so that it still can benefits the poor and the suppliers also can maximize their profit. Furthermore, with government intervention people who live in China can get their houses easily and the suppliers can supply the houses at the same time the suppliers also can maximize their profit
Используемые источники
1. Microeconomics Articlehttp://microarticles04.blogspot.com/2012/10/individual-2- analysis-for-home-prices.html.

Individual 2- Baby Milk Price
According to the news, Parents want Milk for Babies to be made a Price Controlled Item, 6 October 2012 which taken from the Star online, http://thestar.com.my/news/story.asp?file=/2012/10/6/nation/20121006163308&sec=nation, the manufacturers seems to raise the baby milk prices to a higher price in the market to gain more profit. Nowadays, the price for the baby milk is getting higher and higher and many of the parents cannot afford it, so many of them will hope for government to control the situation of the baby milk. Therefore, this news will leads to the demand and supply and also hoping for government intervention. The demand for the baby milk has decreased as the price had increased. When other things remain the same, price for goods had increased and the quantity demand for the good has decreased, is it known as the law of demand.
Furthermore, the law of demand will result from substitute’s effect and income effect. Substitutes effect is when the relative price which is opportunity cost of a good rises, people will seek substitutes for it, so the quantity demand for the good decreases. Therefore, I believe that many people will buy the cheaper product to replace the expensive product when they can’t afford the high price. In this case, many people will buy cheaper baby milk instead of the expensive milk. However, it will leads to income effect in the law of demand. Income effect is when the price of a good rises relative to income, people cannot afford all the things they previously bought, so the quantity demand for the good will decreases. People’s income has not increased but they are forced to buy things which the price is in the higher price level. The price for the baby milk has increased by the manufacturers but the people’s income remain the same, people will not able to afford the previous baby milk they bought, so they have to buy the cheapest milk which will cause the demand for the previous baby milk decreases.


Besides the demand has some changes, even the supply will has some changes too. As I know, suppliers will never do a business without gaining high profit, so it fulfill the law of supply that when other things remaining the same, the higher the price of a good, the greater the quantity supplied. Furthermore, the law of supply results from the general tendency for the marginal cost of producing a good to increase as the quantity produced increases. Producers are willing to supply a good only if they can at least cover their 131
marginal cost of production. In this baby milk case, the suppliers which are the manufacturer will supplier even more expensive baby milk in the market. Every manufacturer wants to gain profit from the baby milk and they want to maximize their profit. These actions will not benefits everyone as not much people are able to afford the baby milk in higher price, the demand for it will decrease and at the same time the suppliers will not gain their profit from here. Therefore, many people are hoping for government to control this situation in the market in order to benefit everyone. This is known as the government intervention.


As the baby milk price is higher, many parents are hoping for government to control the price for the baby milk as many people are not able to pay the price for baby milk in the market now. I believe that government should take some action such as set a price ceiling in order to let the people to afford the baby milk. A price ceiling is a regulation that makes it illegal to set a price higher than specific level. Any price that set above the price ceiling is considered as illegal, so the manufacturer will lower the price for other poorer people. With price ceiling, many people can afford the baby milk and the qualities of the baby milk will also as good as the others. Government should set the price lower than the old times, so that it is also benefits the poor. However, if the government set the price too low it will cause powerful effect which is shortage of the baby milk. In the lowest price, suppliers are not willing to supply more baby milk to others. The demand for baby milk will increases as the price is low because they can afford it. This will cause shortage because the quantity demand for the baby milk exceeds the quantity of supplies. Many people will demand more for the baby milk as the price goes low. When the price is set in too low, the search activity will increased and there is also a black market existing. The time looking for someone to do business with is known as search activity. Many people will search the lowest price of baby milk and do business with the person. People might end up in a black market where it is an illegal market. If the government set the price higher than the equilibrium price, it will also cause problem which is surplus of the baby milk. Surplus is the quantity supplied of the good exceeds the quantity demanded for the good. Therefore, government cannot set the price too low or too high which will cause big problems to everyone. In addition, I also believe that government should also provide subsidies to the parents such as letting the mother have work out time to nurse their children.


In conclusion, the price of baby milk in the market now is too high which cause some of the people who less income cannot afford it. Parents are hoping that government will control this situation by stopping the price of baby milk increasing by manufacturers. With government intervention, people’s life might be easier than previous time but it will also cause some problems to others which are mention above. In addition, sellers and buyers have to corporate with each other in order to gain benefit. Sellers must willing to sell their products in a price level that buyers are willing to buy and afford to buy. By this, both of the sellers and buyers can gain their benefit together at the same time
Используемые источники
1. Microeconomics Article
http://microarticles04.blogspot.com/2012/10/individual-2-baby-milk-price.html.
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