This is the difference between macroeconomics and microeconomics. Macroeconomics studies the economy as a whole using a set of very broad principles, while micr

This is the difference between macroeconomics and microeconomics. Macroeconomics studies the economy as a whole using a set of very broad principles, while microeconomics looks at smaller segments with their own domain-specific rules. Education: There is an artificial restriction on the number of "good" universities. As demand for Ivy League schools increases, supply does not, so people are willing to pay more and more for it. It takes many years to build up a school's reputation. Also, the US Government guarantees student loans, so while the financial system would normally correct this by appropriately incorporating risk when issuing loans to students attending sub-par schools, they do not in this case. But some pull-back is happening; specifically with law schools. Housing: This is a relatively recent issue, but essentially it's the same thing as education: there are only so many "desirable" places to live, but an increasing demand for them. The supply of housing in popular areas can't increase as quickly as demand; it can take a decade or more just to acquire the land to build a dense multi-family structure on top of a block of row homes. The bay area also has a lot of problems in that it tries to protect existing communities by making it pretty difficult to build anything, which ultimately just drives up the price of housing. NYC has other issues because globally, wealthy people see it as a status symbol to have an apartment in Manhattan and London. They buy it as an investment and often don't use it, but this prices out people who live in the area. Health Care: This is a whole other subject; pricing in health care is largely NOT driven by supply and demand. It's closer to extortion; if I tell you that you're going to die or be disabled unless you pay me $50,000; you're going to pay me. Congress has shown little appetite to actually fix the problem: there are too many middlemen with opaque pricing, and consumers will pay whatever they have to when it comes to their health. Prices will continue to rise until people start to demand action.