A Many medicines are incredibly expensive in the US, and much cheaper overseas We can use S D and elasticity to answer the following questions 1 Why are the drugs more expensive in the US (why are S D different in US versus other countries ) 2 Why does the elasticity of D make the problem worse 3 Why isn't there more competition to push drug prices down 4 What would happen if we pass a price control to limit the price that companies charge How could we decide what a fair price would be How might this policy create immediate problems (HINT Think about what happens if we are not at an equilibrium ) Why might the policy create long term problems and result in fewer new medicines being produced 5 What if instead of lowering prices, we got rid of patents or made them shorter 6 What else could we do to lower prices B Is supply upward sloping Does it bend backwards If wages go from $10 to $15 an hour, would you be willing to work more hours Would more people work If wages go to $50 or $100 or more would hours keep going up Would weeks per year or years over your life What factors shift the supply of labor Why would S be higher for some industries Remember that the wrong answer is PRICE WAGE Also remember that supply comes from workers, not companies Why is D for labor different for different industries What factors shift the demand for labor Many schools pay teachers the same wage, even though the S of different types of teachers might be different Why might this be a problem C 1 Do you think D for electricity is elastic or inelastic Why 2 People use electricity every day, but most people don't see the price until after they get the bill at the end of the month How does this affect elasticity of demand Why 3 Demand for electricity rises during heatwaves as people use their AC more often Why does the elasticity of supply affect how P and Q change when D rises

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A. Many medicines are incredibly expensive in the US, and much cheaper overseas. We can use S&D and elasticity to answer the following questions... 1.

A. Many medicines are incredibly expensive in the US, and much cheaper overseas. We can use S&D and elasticity to answer the following questions... 1. Why are the drugs more expensive in the US? (why are S&D different in US versus other countries?) 2. Why does the elasticity of D make the problem worse? 3. Why isn't there more competition to push drug prices down? 4. What would happen if we pass a price control to limit the price that companies charge? How could we decide what a "fair" price would be? How might this policy create immediate problems? (HINT: Think about what happens if we are not at an equilibrium.) Why might the policy create long-term problems and result in fewer new medicines being produced? 5. What if instead of lowering prices, we got rid of patents or made them shorter? 6. What else could we do to lower prices?

Is supply upward sloping? Does it bend backwards?
If wages go from $10 to $15 an hour, would you be willing to work more hours? Would more people work?
If wages go to $50 or $100 or more -- would hours keep going up? Would weeks per year or years over your life?
What factors shift the supply of labor? Why would S be higher for some industries? Remember that the wrong answer is PRICE/WAGE! Also remember that supply comes from workers, not companies.
Why is D for labor different for different industries? What factors shift the demand for labor?
Many schools pay teachers the same wage, even though the S of different types of teachers might be different. Why might this be a problem?

1/ Do you think D for electricity is elastic or inelastic? Why? 2/ People use electricity every day, but most people don't see the price until after they get the bill at the end of the month. How does this affect elasticity of demand? Why? 3/ Demand for electricity rises during heatwaves as people use their AC more often. Why does the elasticity of supply affect how P and Q change when D rises?