CONSUMER/PRODUCER SURPLUS
... between price consumers are willing to pay and the price they do pay for a unit of a good. ► Demand curve shows the highest price consumers are willing to pay for different amounts of the good. ► On the graph, consumers are willing to pay a price of $35 for 10 units, $30 for 20 units, and only $25 f ...
... between price consumers are willing to pay and the price they do pay for a unit of a good. ► Demand curve shows the highest price consumers are willing to pay for different amounts of the good. ► On the graph, consumers are willing to pay a price of $35 for 10 units, $30 for 20 units, and only $25 f ...
Equilibrium and Disequilibrium
... Final Equilibrium Quantity & Price when Demand & Supply move in Opposite Directions As a result of the price of lemons falling (a complimentary good) the demand for spinach increases from D to D’ and temporarily raises the price from P* to P1 and quantity from Q* to Q1. At the intermediate equilibr ...
... Final Equilibrium Quantity & Price when Demand & Supply move in Opposite Directions As a result of the price of lemons falling (a complimentary good) the demand for spinach increases from D to D’ and temporarily raises the price from P* to P1 and quantity from Q* to Q1. At the intermediate equilibr ...
Test #1, ECMC02, Oct 10 2003
... the new supply curve (S=) and show the new equilibrium quantity (Q1*) and the new equilibrium price (P1*). (b) Now suppose that a 50% tariff is placed on shoes. Show the new supply curve (S@) and the new (after-tariff) equilibrium quantity (Q2*) and the new equilibrium price (P2*). (c) Indicate by s ...
... the new supply curve (S=) and show the new equilibrium quantity (Q1*) and the new equilibrium price (P1*). (b) Now suppose that a 50% tariff is placed on shoes. Show the new supply curve (S@) and the new (after-tariff) equilibrium quantity (Q2*) and the new equilibrium price (P2*). (c) Indicate by s ...
Chapter 14
... under the market supply curve up to the quantity produced In a competitive market without any intervention, aggregate surplus is maximized No deadweight loss: reduction in aggregate surplus below its maximum possible value ...
... under the market supply curve up to the quantity produced In a competitive market without any intervention, aggregate surplus is maximized No deadweight loss: reduction in aggregate surplus below its maximum possible value ...
---PROMINENT TOPICS WORTH REVIEWING--
... 1. Describe the circular flow of the economy. What types of activities make the economy grow? What types make the economy shrink? What role, if any, does the government play in the circular flow? 2. Describe elasticity as it applies to both supply and demand. How is elasticity different than the pri ...
... 1. Describe the circular flow of the economy. What types of activities make the economy grow? What types make the economy shrink? What role, if any, does the government play in the circular flow? 2. Describe elasticity as it applies to both supply and demand. How is elasticity different than the pri ...
demand
... It’s assumed that consumers act rationally. It’s assumed that consumers have limited incomes It is assumed that consumers aim to get their maximum utility from the way they spend their incomes It is assumed that consumers are subject to the Law of Diminishing Marginal Utility. ...
... It’s assumed that consumers act rationally. It’s assumed that consumers have limited incomes It is assumed that consumers aim to get their maximum utility from the way they spend their incomes It is assumed that consumers are subject to the Law of Diminishing Marginal Utility. ...
Decision Making and Demand and Supply
... Households or consumers buy goods and services for a variety of reasons, but can we model it? Economics assume that individuals are rational – they weigh the costs and benefits of their actions and then try and maximize TNB. What are the benefits? Economists have modeled benefits as satisfactio ...
... Households or consumers buy goods and services for a variety of reasons, but can we model it? Economics assume that individuals are rational – they weigh the costs and benefits of their actions and then try and maximize TNB. What are the benefits? Economists have modeled benefits as satisfactio ...
here
... price ceiling, PC = 800. Note that this is less than the equilibrium price, P = 1000. At the ceiling price, quantity demanded is 2.2 (above the original equilibrium), but quantity supplied is only 1.8 (below the original equilibrium). So there is a housing shortage of 2.2-1.8 = 0.4 units: ...
... price ceiling, PC = 800. Note that this is less than the equilibrium price, P = 1000. At the ceiling price, quantity demanded is 2.2 (above the original equilibrium), but quantity supplied is only 1.8 (below the original equilibrium). So there is a housing shortage of 2.2-1.8 = 0.4 units: ...
Chapter 18 Worksheet
... Chapter 18 For problems 1–3: (a) calculate elasticity, and (b) state how elastic demand is. 1. Price is increased from $20 to $21 and quantity demanded falls from 10 to 9. 2. Price is lowered from $40 to $39 and quantity demanded rises from 7 to 8. 3. Price is lowered from $20 to $19 and quantity de ...
... Chapter 18 For problems 1–3: (a) calculate elasticity, and (b) state how elastic demand is. 1. Price is increased from $20 to $21 and quantity demanded falls from 10 to 9. 2. Price is lowered from $40 to $39 and quantity demanded rises from 7 to 8. 3. Price is lowered from $20 to $19 and quantity de ...
3. A change in consumers` tastes leads to a shift of the demand
... 3. A change in consumers' tastes leads to a shift of the demand curve. A change in price leads to a movement along the demand curve. 4. Because Popeye buys more spinach when his income falls, spinach is an inferior good for him. His demand curve for spinach shifts out as a result of the decrease in ...
... 3. A change in consumers' tastes leads to a shift of the demand curve. A change in price leads to a movement along the demand curve. 4. Because Popeye buys more spinach when his income falls, spinach is an inferior good for him. His demand curve for spinach shifts out as a result of the decrease in ...
Cameron ECON 100: SECOND MIDTERM (A) Winter 01
... 1. The Boeing Corporation calculates that it can sell 20 planes for $20 million each or 30 planes for $18 million dollars each. Then the marginal revenue from sale of a plane is a. less than $20 million b. $20 million c. between $20 million and $30 million d. $30 million e. more than $30 million. 2. ...
... 1. The Boeing Corporation calculates that it can sell 20 planes for $20 million each or 30 planes for $18 million dollars each. Then the marginal revenue from sale of a plane is a. less than $20 million b. $20 million c. between $20 million and $30 million d. $30 million e. more than $30 million. 2. ...
LECT5F03
... The LAW OF DEMAND – THE HIGHER THE PRICE THE LOWER WILL BE THE QUANTITY DEMANDED. ...
... The LAW OF DEMAND – THE HIGHER THE PRICE THE LOWER WILL BE THE QUANTITY DEMANDED. ...
Two
... 11. Pam and Jane produce apples and oranges. They can gain from exchange a. unless one can produce more of both goods. b. if each specializes in the good for which she has the higher opportunity cost. c. unless they have the same opportunity cost of producing apples and oranges. d. unless they have ...
... 11. Pam and Jane produce apples and oranges. They can gain from exchange a. unless one can produce more of both goods. b. if each specializes in the good for which she has the higher opportunity cost. c. unless they have the same opportunity cost of producing apples and oranges. d. unless they have ...
File
... Marginal revenue = the extra revenue associated with the production and sale of one additional product. break-even point = the total output or products the business needs to sell in order to ...
... Marginal revenue = the extra revenue associated with the production and sale of one additional product. break-even point = the total output or products the business needs to sell in order to ...
QUESTIONS FOR DISCUSSION
... give up a kidney. However, the quantity supplied would probably not increase very much as price increased due to the risks involved in the surgical procedure to remove a kidney and the fact that the donor would only be left with one kidney. The supply curve would start out at the point on the x-axis ...
... give up a kidney. However, the quantity supplied would probably not increase very much as price increased due to the risks involved in the surgical procedure to remove a kidney and the fact that the donor would only be left with one kidney. The supply curve would start out at the point on the x-axis ...
Economic equilibrium
In economics, economic equilibrium is a state where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal. Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes and the quantity is called ""competitive quantity"" or market clearing quantity.