📚 Microeconomics

Supply Shifts:

• 🇮🇳 India subsidised gas → supply of gas shifts right.
• 🇬🇧 UK: More airlines entered the market → air travel supply shifts right.
• 🇬🇧 UK: Sugar tax → sugary drinks supply shifts left.
• 🇲🇬 Madagascar cyclone 2018 → vanilla supply shock, price rose to $600/kg.

Demand and Supply Gaps:

• 🇮🇶 Iraq War 2003 → oil supply down, oil prices rose from $20 to $35 per barrel.
• 🌾 Harvest season → excess supply of crops → lower prices.

Elasticity Examples:

• High PED: Gucci luxury clothing.
• Low PED: Cigarettes (USA PED ≈ -0.4); Daraprim (cancer drug) price x50, little demand change.
• Positive XED: Coke vs Pepsi (+0.7).
• Negative XED: Tea and milk (weak complements); smartphones and mobile apps (strong complements).
• Negative YED (Inferior Goods): Second-hand clothes, margarine.
• Low Positive YED (Normal Goods): Most home food (YED ≈ 0.2).
• High Positive YED (Luxury Goods): Premium cars, yachts, jewelry.
• High PES: Taxi services, smartphones.
• Low PES: Nuclear reactors, fresh produce, housing.

Government Intervention: