MicroEconomics

Microeconomics

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Institution

PART A

Question One

This is usually done by imposing a maximum price that the universities must not charge above for the tuition fee. The equilibrium price is the price at which the quantity demanded is equal to the quantity supplied. Setting the tuition fee to below the equilibrium price may have many effects on different stakeholders. One of the immediate of effects of having tuition below the equilibrium price is that some of the universities will be closed. The lower price and high operating cost may compel the universities to temporarily or permanently terminate their services. State funding for the universities is similar to the state’s price ceiling for the universities. A tuition fee below the equilibrium price also has a high effect on the number of students enrolling in the universities. The lower the equilibrium price, the higher the demand for a particular commodity or service. This translates to the super-high number of students joining the universities due to the lower fees required. The higher number of students in the universities increases the literacy levels of people in the society (College-cram.com, 2015).

Tuition fee below the equilibrium level has numerous negative effects on both the students and the administration of the universities. The high population of students in the universities may lead to competition for and depletion of the available resources. The universities must get more funds to finance their operations and ensure that the students get good learning conditions. Congestion in the universities may lead to improper management of the administrations. The effect of low equilibrium rate in tuition may force some of the universities to close. This will produce a ripple effect on the number of universities in the regions. This aspect directly affects the learning opportunities of the people in the regions. An example of the effect of lower tuition is when a report indicated that Drew University in New Jersey was forced to downgrade. This was as a result of the decline in the cash flow and increase in the overall operation costs (Beta.tutor2u.net, 2015) .

Question Two

The major effect of the offering tuition lower than the equilibrium price is congestions in the universities. More people cause competition for the little available resources that the universities have established. Education is usually affected in such situations. It is not equally accessible, especially in situations where each student must have his or her educational resource. The congestion in the universities may also deter the learning progress when the classes are too small to accommodate the students' population. Universities with a high population of students have a problem of inadequate teaching staff (Freedman, 2013)

PART B

Question a

Influenza is a disease that can make the patients suffering to be hospitalized or in worst scenarios it leads to death. It is consequently very necessary for people to be vaccinated against the flu. This helps in reducing the widespread of the various in the different regions. The administration of the flu shot is a public good since it helps in safeguarding the wellbeing of the people in the society. The flu shot works as a means of reducing the suffering of the people by the flu.

Question b

The flu vaccine is very beneficial to the economy. It plays a major role in improving the economy among the people who have been vaccinated. The human capital is vital in shaping the economy of a country. A high population of people can be used to participate in various national building tasks. Flu shots reduce the rate of deaths caused by the flu. Protecting the community against death by flu helps increase the chances of a larger population participating in building the economy. It also saves on medical bills to cure the flu, hence saving the money to be used for economic activities (Cdc.gov, 2015).

Question c

The government performs a major role in ensuring that the citizens get vaccinated against the flu. One of the key methods utilized by the government is administering free flu shots via Department of Health and Human Services. The Department of Health and Human Services does not take part in giving the flu shots, but it ensures that enough vaccine is produced for every vaccination season. The government also offers support to the flu vaccine manufacturers in a bid to aid in the distribution of the flu shots. It also aids in the advertisement of the need for flu vaccinate, which is beneficial in creating flu awareness in the community (Cdc.gov, 2015).

Question One

The private market for the flu vaccination cannot produce sustainable vaccination for the entire population in the country since it is a costly project. It is, therefore, crucial for the government to merge its operations with the private market for a flu vaccination to make the entire project successful (Cdc.gov, 2015).

Question Two

The government can provide financial assistance to the private market for flu vaccination. The money can be used for flu vaccine production. It can also be used to finance research for better flu vaccines.

Question Three

a. An example of a private good is a yacht.

b. An example of a public good is a train

References

Beta.tutor2u.net,. (2015). Education Funding - Tuition Fees in the UK | tutor2u. Retrieved 8 October 2015, from http://beta.tutor2u.net/economics/reference/education-funding-tuition-fees-in-the-uk

College-cram.com,. (2015). Price Ceiling | Economics: Government Intervention | College-Cram.com. Retrieved 8 October 2015, from http://www.college-cram.com/study/economics/government-intervention/price-ceiling/

Freedman, J. (2013). Why American Colleges Are Becoming a Force for Inequality. The Atlantic. Retrieved 8 October 2015, from http://www.theatlantic.com/business/archive/2013/05/why-american-colleges-are-becoming-a-force-for-inequality/275923/

MicroEconomics

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