After reading the text and watching the tutorial videos below, craft an initial post that answers the following questions:

• What are the possible reasons why the government may make a market intervention?
• What are the possible implications of such interventions?
• How might the wedge between consumers and firms lead to market distortions?

Choose at least two videos from those below and incorporate their associated reflection questions into your response.

After you have completed your initial post, pleaseconsider the response of at least two other students.

Reflection questions and their respective Video links:

Economic Efficiency: maximizing consumer and producer surplus

https://www.khanacademy.org/economics-finance-domain/microeconomics/consumer-producer-surplusLinks to an external site.

Would you pay a price for a good or service above the benefit you receive from it?

On the other hand, would you ever part with something at a price below what value it at? Under what conditions might you change your mind? (For example, you need money in an emergency.)

Price ceiling example: Rent Control & Deadweight loss

https://www.khanacademy.org/economics-finance-domain/microeconomics/consumer-producer-surplus/deadweight-loss-tutorial/v/rent-control-dead-weight-costLinks to an external site.

What are some of the un-intended consequences of not allowing the market mechanism to work properly? For example, not allowing the market price to increase when there is a shortage of a good or service.

Price floor example: Minimum Wage & Deadweight loss

https://www.khanacademy.org/economics-finance-domain/microeconomics/consumer-producer-surplus/deadweight-loss-tutorial/v/minimum-wage-and-price-floorsLinks to an external site.

There was a time during the Great Depression, that agricultural price floors were supported by the government purchasing the surplus commodities and destroying them. A less destructive method (subsidies) is employed today. How are subsidies a better way to keep farmers in business?

Taxation, the Distortionary Wedge & Deadweight loss

https://www.khanacademy.org/economics-finance-domain/microeconomics/consumer-producer-surplus/deadweight-loss-tutorial/v/taxation-and-dead-weight-lossLinks to an external site.

Would the tax revenue collection from a good or service with no real alternatives (no substitutes) be higher or lower than a good with readily available real alternatives? (Hint: "Inelastic" is code word for less real alternatives, substitutes or choices.)