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Punto Fijo, November 22nd, 2012 (Venezuelanalysis.com) - The Venezuelan government has announced new controls on the prices of housing rents, while prices of medicines are also currently under review. Many basic goods in Venezuela are subject to price controls, including some food items and domestic goods, and the government has now added housing rents to the list of products subject to regulated pricing. In taking some pointers from "The Rent Is Too D*** High" party, Venezuela has decided to set a case to case price ceiling for the housing rental market. Most landlords will set the price based on construction costs, which tends to put tenants in a tight situation when looking for a somewhat temporary residence. Because of this, the government of Venezuela has forced landlords into setting prices only as high as what the Housing Ministry determines to be the true value product. Venezuela has also started doing this with medication, since medicine should be made available to all who are in need of it, although there has been backlash from pharmaceutical companies. They argument is that the artificial lowering of prices in the pharmaceutical industry will cause suppliers to produce less of the medicine than what the population needs.

This article talks about the increase of oil prices due to the price of the dollar being down. This article supports the topic of this week because as the demand of oil increases so do the prices. As the demand for the consumption of a product increases, the price for the product either increases or decreases. Changes in the relative prices of goods (such as oil) occur because of technological change or shifts in supply or demand. Based on this article "The price of oil and gasoline are up because the Federal Reserve has driven the value of the dollar down." - Charles Kadlec

This article talks about the increase in demand of gold and the amount of price paid to get gold between 2010 and 2011. The demand of gold increased by 11% from the first quarter of 2010 to the first quarter of 2011 while the price increased by 40%. The increase in demand directly increases the supply of gold because if people want it, the rate of mining would increases so that gold is available at all time. Also, the amount of money spent on the gold would also increase because gold does not grow and one day gold would finish. The people who sell the gold would therefore put additional money on the price of the gold to get their own profit. This process would however continue because every time gold is found, the amount of gold left in the earth reduces. This allows the seller to always increase the price of the gold which means that there can never be a balance between the price and the demand. As the demand of gold increases, the price of gold decreases and the amount of gold left on earth decreases. Looking at the chart in the article, we can see that if the demand of gold increases the supply of gold would also increase but there was a slight decrease in the years 2007 to 2009. The article states that 'China's total annual gold demand topped 700 metric tons for the first time ever last year and is expected to keep rising over the next decade'.

This article talks about the risks of lowering prices in hope of increasing demand. It mentions the effects of price elasticity on this as well, it states, "If we assume the products' price elasticity is at the lower end of that range [...] then price promotions become even riskier". This is because it requires a big change in price to get even close to a substantial increase in demand. If the change is not huge, the effect on demand will be negligible.

Gas being an inelastic product, has a small change in demand if the price is increased. It was a good time to increase the price of oil because "The improvement in the nation's economic health has increased demand for oil" so there would be an increase in revenue if the price was increased.

A policy for the price control of certain medicines was approved by India's cabinet this week. The goal is to make medicine more affordable than it already is to the poor (producers argue that there is already sufficient competition in the market to keep prices low).

This article talks about how the Indian government is imposing price control on certain drugs to. The government claims that its is doing this to make it more affordable for the poor. They say this will also help patients become aware of less costly alternatives to some drugs.

This article discusses how The White House wanted to make its policy on price controls clear to Republicans in Congress, some of whom have been agitating for price controls. The president told Republican House deputy whips last week he would oppose all price controls, but the White House wanted to hit the message even harder.

After Sandy hurricane devastated the Eastern Coast of the United States, gas became scarce. Due to this, authorities introduced so called odd-even gas rationing which limited the consumption the same as when governments introduce price ceilings and shift the demand curve to the last. With few major differences. Too many people needed fuel to power generators. Government gave subsidy to oil importers, so price slumped a bit (not significant) - so this was the maximum price. Simultaneously, also the demand grew bigger and there were only a few gas stations operating and those who were operating experienced inevitable chaos. So authorities shift the demand curve to the left until equilibrium is reached at maximum price to limit the consumption, so that queues were manageable. This rationing ends tomorrow as recovery is completed.

This article is essentially connected to aggregate demand (investments), but the following part can be perfectly analyzed with the this week's topic, aggregate supply: "The investment will also help U.K. energy security by reducing hydrocarbon imports at a time of higher international oil and gas prices. "Too often we've been seen as part of the problem, rather than part of the solution because production output had fallen. But we're stopping the decline and increasing output and that will have a more positive impact on the U.K. economy," Mr. Tholen told The Wall Street Journal. The higher investment in new projects and redevelopment of older fields will help bring another 500,000 barrels of oil equivalent a day onstream by 2017, taking output up to around 2 million barrels of oil and gas a day by 2017 or earlier. The higher investment in new projects and redevelopment of older fields will help bring another 500,000 barrels of oil equivalent a day onstream by 2017, taking output up to around 2 million barrels of oil and gas a day by 2017 or earlier." High international oil and gas prices mean higher average costs of production - change in the costs of raw materials, because oil and gas are widely used in most production processes. This is the reason for the shift of the SRAS inwards. However, higher price level means that the oil production and oil-transforming industries will increase their output. This is also great for the sake of price of imports, which are relatively too high, allowing domestic industries to decrease their average costs of production, meaning that SRAS will increase. So we should consider effects of both aspects and add them up in order to get a real picture (overall effect of current oil and gas prices). Investments are shifting the LRAS curve to the right, because there are likely to be improvements in the quality of the factors of production (technological advancements, discovery of new resources and re-establishing the past (oil) fields,

The article talks about topic covered already in the title, with some interest to the growth of industry of southern euro-zone countries and exacerbation of German and French production. So obviously, here I can refer to PPF where resources (also human capital) are being used more efficiently; here is the movement inside existing frontier or perhaps even outward shift with improved quantities and qualities of goods (especially capital). Nevertheless, economists still fear the euro-zone might fall in recession again if there are two quarters of consecutive fall (if the economy contracted). The market clearing price of many durable goods can be determined only to some extent, due to the presence of outside disturbance (fiscal and banking crisis - therefore always introducing new policies and bail-out deals). Another thing associated with the previous sentence and the article is the price mechanism (interaction of demand and supply) which allocates resources. Under unstable circumstances which are currently taking place in euro-zone, incomes are plummeting (falling GDP per capita) except for some particular periods of time when the economy meets actual growth, meaning that there is less demand leading to an inverse effect for producers. Normally, producers wish to supply more at higher prices, especially if income of people soars so they buy more of that goods. Therefore, higher prices do not present an incentive for producers to produce more. All the producers want to increase their producer surplus; but the trend is clear - towards maximized community surplus, since producers depend on consumers' utility.

Here we have an uncanny case of a company that has little to no competition, yet its market share is actually dropping. Sony has been constantly ignoring the price elasticity of it products so much so that they refuse to recognize their fall from favor in the market war. "Our initial expectation is that sales should double at a minimum," Jack Tretton, chief executive of Sony Computer Entertainment America, said in an interview [at the time]. "We've gotten our production issues behind us on the PlayStation 3, reaching a position to pass on the savings to consumers, and our attitude is the sooner the better." As a result Sony has kept its prices constant.

This article talks about Virginia carrier NTelos Wireless $50 discount for the new iPhone 5. This is a win for this company, because the demand will increase (movement along the existing demand curve). At the same time we can introduce substitution effect: iPhone 5 for the NTelos' customers level of attractiveness will rise due to price drop, whereas customers of other carriers in Virginia offering iPhone 5 at higher prices will find it too expensive there, so they might decide for the switch of the carriers, resulting in left shift of the demand curve for carriers offering iPhone 5 at higher prices (less demand at every price). Also demand for mobile phones at T-Mobile might decrease as well due to the fact they don't offer iPhones 5 which are selling like hot cakes around the world, so customers won't find they offer as attractive as the offer of other carriers selling iPhone 5 (here we talk about 'tastes/preferences factor' and other factors).

This article talks about the tramendous increase in price of one resource after an earhquake. If there are only a few resources the price will increase as the demand stays the same or even increses.

This article talks about the increase in price of oil and the increase in demand for oil. Analysts said that the price of oil would increase as time goes and suppliers are trying to meet the demands of people. The cost of one barrel of North Sea Brent has increased and made a new record in both euro and pounds. 'Many analysts say the broader trend is that prices will continue to rise because of risks to oil supplies'. Oil supplies were slowed down in the late 1970's and early 1980's because of the war between Iran and Iraq. During global consumption, oil would increase in price by about 1.3 million barrels a day said by the U.S. Energy Information Administration. However, supply will fall by about 310,000 barrels a day.

This article talks about how a few larger electricity and gas companies have increased their prices after the news about a cold and bitter winter in the UK. If we apply this to what we have read about this week, they know that the demand for fuel in houses will increase, but with a increased price they can avoid shortage during this period of time, hopefully. At leas this is what they try to do. They also know it is profitable for them, since people will still need the fuel due to the cold, so the income for the company gets higher.

The article I chose describes the housing price in the UK. It only changed very slightly so you could say that the housing price stayed stable. This means that the people living in the UK are willing to pay the same amount for their house and are able to do so. The market for houses is in equilibrium.

These days, with an economy recovering from a slight collapse and people looking to alternatives to gasoline and coal, a shortage of oil is not very good for the fossil fuels industry. Yesterday, the Organization of Petroleum Exporting Countries announced that oil prices would remain stable, even in these times of uncertainty. With all the negatives of oil (the pollution, the wars it has caused, the danger it can put workers at to obtain, etc.) demand has started to decrease. But, petrol suppliers can't just increase their prices like the supply demand curves might predict because they don't want to risk scaring the remaining consumers into thinking the price of oil will only increase as more of it is used up. This has left OPEC and all of it's members in a bit of a pickle.

Gas prices increased in California about 0.39 cents between September 21 and October 7. To decrease prices Gov. Jerry brown ordered to make an early transition to winter-blend gasoline which evaporates more quickly. This move could increase supply by as much as 10% said Gov. Brown.

The article I chose deals with shortage of primary products in Venezuela. It first describes how the prices changed. Afterwards it shows that the government mada a maximum price on these products. It then describes the difficulties with inforcing a maximum price.

the article is talking about how ex-president Bush decided not to control the price of energy, although the white house wanted to control energy prices.