subsidies

[JCM718]

Thanks for this video! Really helped on explaining the benefits/consequences of subsidies for a globalization class!

[didierfagba]

wow this was really useful... but i still hv problem memorising it all

[sarahrocksyourworld]

Omg thanks so much. Got my AS mocks in 9 days

[tindallta]

very incomplete... you are forgetting to factor in the new demand curve. which in theory should also shift proportionally out by the amount of the subsidy.

in the real world when we look at goods and services that have a govt subsidies you will rarely find that the price has declined by the subsidy. in fact, most often you will find that producers will often raise prices close to the new demand curve caused by the unintended consequences of the govt subsidy.

[eatacake12345]

what over methods can the government use to over come positive externalities?

[georgiarebecca100]

If i do well in my Economics exam next week it will be solely down to you, seems to actually make sense when you teach it. Thankyou!

[ShotGun1861]

our econ teacher recommended this video..

this makes so much more sense than what our teacher taught us xP

[MrNkdj2]

You are a genius why cant my teacher teach like this

[Tps1969]

Very helpful, thanks :)

[havanabeachincuba]

What happens with producer surplus after subsidies? And what is the deadweight loss? Thnks

[colbykhor]

@havanabeachincuba

producer surplus decreases

[sfsy1]

i like your videos :)

[saneedblozio]

thq guy=]

[ysmn68]

what about Taxes?

[ysmn68]

Thank you. My teacher recommended you! ;D

[Cytoskeleton1]

thanks a lot

[lbc723]

thanks

[toohug01]

Thanks heaps from AUSTRALIA, keeping me passing University since 2010

[abdullahfbi911]

thankxxxxxxxxxxxxxxxxx

[Lietumi]

Dear Phil, THANK YOU SO MUCH! I've got my Micro Economics retake in like 5 hours and as i have 3 exams tomorrow, I didn't have enough time to look through all of my economics notes. I've watched all of your videos and i found it so helpful - you have a gift of explaining. Keep posting videos, I'm going to use them for my Macro Economics understanding. Thank you again!

[Theoreowhore]

The Like Bar looks like a joint <3

[studentecon]

Great video! I just wished you included an explanation of how consumers surplus and producers surplus were effected.

[milanjelenjeden]

Great video, helped me a lot! I just wanted to ask about the equillibrium price - what exactly is it? Does it represent the average price of products/services or is it more or less the only price at which products are sold?

[showmick12]

THANKS PROFESSOR!!! LOVE FROM SWEDEN

[55gingerninja]

what about elasticity? what happens if demand/supply are inelastic for example?

[RickyZzone]

Thank you so much, now it all makes sense! This helped me a lot! :)

[alan170892]

thanks man, you helped me a lot for my econ's test preparation

[891anarchy]

you are seriously amazing, i wish i had you as a teacher, i thought i would be hopeless for my economics mock exam tomorrow BUT I NOW HAVE HOPE, in the past 10 months i have learnt nothing in comparison to the past 45 mins of your videos

[shahrul19933]

I LOVE YOU PROFESSOR! YOU REALLY HELPED ME ALOT! PLEASE KEEP THE VIDEOS COMING! FROM MALAYSIA! ;)

[TBUT743]

I love your videos. They have really helped me to understand theories of Economics much more clearly. Thanks for your effort.

[setch77]

pajholden,

so what are the effects of say subsidies on price volatility of agricultural commodities?

[dk1536dk]

Thank you for your videos are great!!

Do you have videos on all micro economic topics?

Is there a way I can get access to all your videos as I couldn't find some

For e.g. How quotas effect the importing and exporting countries.

Or do you have a DVD I can buy.....

I have my exams in 6 days.....

I would have studied in any University in Sydney if you were the lecturer!!! too bad Greece is quite far.

You are a legend!!!!!!

[holamellamobob111]

Thank you very much, i have my economics a level in 2 hours and i am happy to say that thanks to you i will understand the questions, thank you very much from spaain!!

[TomConnorV]

you have now replaced one of my teachers! great vids

[randomrainbow17]

I cannot say this enough... THANK YOU!!!!!!!!

[gammakilla1]

DO YOU GETTING PAYED FOR DOING THIS?!?

[funnyfunny13]

What about when the subsidy is directed at consumers? For example, in a labour market the firms are the consumers of labour. The government gives them a subsidy for each hour every hour worked. Would this subsidy be felt entirely by producers (workers) or some of it?

[sanju0202able]

i like the last action u did soooo sweeet ......bidawy tnk u...... ur videos r rly helpful .

[cclodfe]

Subsidies act like negative taxes??? Last I checked the government didn't produce any revenue. It collects money from the private sector and distributes as it sees fit. Subidies take from taxpayers and redistribute the funds to govt chosen producers. This is not a negative tax. It does not create lower costs of goods. It simply hides the true cost of goods from the average taxpaying citizen.

[cclodfe]

Also, mass producers and large corporations find it rather handy to be able to lobby politicians for theses subsidies. Subsidies are not a "negative tax". The are an unseen tax on consumers. Where exactly do you think the govt gets the money to dole out subidies? What services does the govt provide to generate the funds to provide these subidies? Last I checked the govt produces nothing.

[cclodfe]

Propping up domestic production through subsidies, tarriffs and quotas only hurts american consumers. It is a form of mercantilism. It prevents citizens from obtaining cheaper imports by artificially lowering the cost of domestic production. Read "The Great Sugar Shaft". You should be ashamed of this statist spewing propaganda piece. It has little to do with economics.

[intelgates]

Come Maldives and teach us.We pay $700 monthly+additional bonus by me :P

[pajholden]

@intelgates tempting..... maybe I will retire there.

[DreadAces]

@intelgates only $700 per month? heck my maid gets 1000 euros per month!

[fromage92]

Hi, Phil. Thanks for the amazing video on subsidy. However, I have a question in mind. In subsidy, why does the consumer gain more when demand is inelastic? And why does the producer gain more when demand is elastic? Thanks..!

[omgtheskyiscrying]

@fromage92

Hey I know I'm not Mr.Holden, but hopefully I can help? This might be good revision for me too. Um, If the price elasticity of demand is inelastic this means the demand curve will be relatively vertical. This means the area on the diagram of subsidy passed onto consumer will be greater. And also, logically, if consumers are relatively unresponsive to changes in price then the firm can "absorb" more of the subsidy as it will not effect the demand of the good, right?

I could be wrong..

[fromage92]

Hi Phil.! May I ask you a question? In subsidies, why does the producer gain more when demand is elastic? And why consumer gain more when demand is inelastic?

[RTX94]

@fromage92 @fromage92 You actually have the concepts mixed up. When the PED is INELASTIC, consumers are irresponsive to changes in price, so the producers pass on the incidence of tax on to them, in the form of higher prices. But, when the PED is ELASTIC, producers cannot risk losing sales by increasing their prices, so they end up paying a higher portion of the tax.

Hope that helped! =)

[pajholden]

@RTX94 very well put!

[RTX94]

@pajholden Thank you! Coming from you, it means a lot! =) Since you're online, let me take the opportunity to thank you for all the videos you've uploaded. My AS Economics Exam is in 3 days, and you're videos have helped me out a LOT.

[buckeyesports1]

@RTX94 As such, tax the crap out of cigarettes. We seriously need to start thanking smokers, they pay so much in taxes and they don't collect social security... how great is that?

[bbxshortcake]

hi phil, your videos are great, is there anyway u can make a video or tell me how to graph curves via equations?

[prinsessan11]

thank you very much pajholden!!

ur much better then my teacher!

[WOGI5M]

What about subsidies given to consumers so they can purchase more?

[puresickdead]

Thank you!

[eskimosoap]

Thank you for making things clear for me. If only there were more lecturers like you!

[MrDankeil]

absolute legend!!!

[RememberSeptember]

Thank you so much, these are great for revision! I wish our teacher was this clear in explaining. You do a marvellous job.

[lelectronic]

HI Phil

Thanks soo much for these videos, Every single person that has watched these videos appreciates your work.

thanks again

[waveboi93]

My fav TEACHER! A*

[johnnycyrus]

wow, amazing

from Greece!!

[rainingonshinygrass]

Thank you so much. I have an economics module next week and you may have saved my life.

[Kachaloo]

Love your videos. Life Savers. Thankssssssss.

[georgejacksonio]

thanks again

and i agree you should make a dvd

[kgswe]

Really useful videos... When im to tired to read out of my text book i always watch your videos...

I agree with "cxilelab": "please do continue with your valuable lessons"...

[gayathiritube]

really useful ! thankyou

[ourearthhome]

You will notice that the subsidy given land and real estate in general via failure of governments to tax community created land values (meaning zero cost of production/free lunch to land owners) and tax deductions for everything under the sun do not result in lower cost of land rather just the opposite since land is in fixed supply. These subsidies give people the incentive to buy land/real estate not just for use but for investment thus driving up the price to all buyers. Buyers pay all/more.

[lizzieestmoi]

Legend!

[gorf92]

Thank you. Your lessons are amazing! Please keep up the good work!

[cxilelab]

my school needs teachers like you! you seem very interactive & your explanations are succinct & clear.

please do continue with your valuable lessons!

[fancygremlin]

how would u apply this to labor economics with supply of labor and demand for labor?

[curea113]

real good. thanks..

[sageGRX20]

hey yeah that is a really good idea, do you have a DVD or something we can get..? cant get enough mate ur an awesome teacher, u make eco a pretty cool subject :o)

[02dalyd]

One of the best economic teachers ever! What you have produced in all your videos is nothing short of amazing. Its clear and concice and actually understandable - your MINT!!! And you should create a DVD i know i would buy it lol

[ollysprings]

If you made a dvd you'd be the most minted economics teacher on the planet. How is it possible to be this good??

I've got an A level exam tomorrow on the EU and I've learnt more in the last 30 minutes from your videos than this entire year at school!!!!!!!

[dannyf28]

you should make an economics tutorial dvd or something for a-levels

[Undakover]

real help! thanx!

[GIOGS]

our school will sell all its teachers to get you in!!!

[biddybombogan]

Thanks so much! if your ever in Auckland New Zealand get in contact with me PLEASE! Our school would be honored to have you as a guest speaker

[marinafriends]

I have sent you an e-mail! thank-you so much for all of this! COME BE MY ECONOMICS TEACHER!!! lol

[martinchingy]

so the producers keep the L shaped block at 3:08?

[sna3ke]

you were made for this...you should just do this all day thx again...a lot of help for ib exams

[Kachaloo]

Once again made things soo much clear and interesting. Thanks.

[ShashiK34]

Another great vid, wish you could be our teacher down here in australia

5 Stars...

Shashi

[xxjessistoocoolxx]

thanks so much! when you say the firms absorb the subsidy...does that mean they just keep the subsidy as profit? how would firms not use the subsidy properly?

[pajholden]

Thanks for commenting - In that they don't pass on all the subsidy in the form of lower prices to their customers.

[britneey]

thx homie

[littlelovehearts]

OMGG thank you soo much for your videos :P i totally didnt get subsidies but you made it TOTALLY clear for me. i am more confident in passing my GCSE mock exam .

[pinkbutterflyyyyy]

awesome video!

thank you

please keep posting these extremely helpful videos!

[YunusSancak]

You are just perfect!!!

[dointime85]

once again, extremely enlightening! thank you very much! :-)

[dushirobin]

Please continue these videos, they are way more helpful than my own teacher is.

[cambo61]

Again, nice vid. Although I completely disagree with the idea of a subsidy, you do a great job explaining it!

[ne1l007]

Producers may use the subsidies to cover cost, and not pass it down to the consumer. Why else may subsidies not decrease price?

[manukhan1987]

please can you speak about gold v paper (fiat currency) or decentralised v centralised banks and economic planning thank you

[sweetylotion]

is it the same as the incidence of indirect tax? like... when the demand is more elastic producers pay(keep) more..?

[rfvo]

Yes ofcourse, totally understand it now, Thanks so much.

[rfvo]

Hi Phil,

Thanks for the illustration....however i'm having difficulties with the following statement...

Subsidies typically lead to overproduction, where the marginal social cost at the quantity produced is greater than the marginal social benefit. I can't seem to see this relationship in the graph, if you have the time...please could you tell me where these points would be? Thank you.

[pajholden]

hi rfvo. I suppose that if the point of a subsidy is to boost production of a positive externality creating good, then assessing the correct size of the required subsidy to lift the market generated output to the socially optimal level could be difficult. What if the subsidy was over estimated? Couldn't that lead to over-production - that is to a level of output beyond the socially optimal level? It's a bit like not getting the tax right on negative externality products... Regards, Phil Holden.

[luvisprecious]

wow this sounds crystal clear now.

Thanks

[Cloud10v35Aerith]

i love your videoes! definately a great reivew for my economics courses im taking:)

[tanzirou]

GREAT!