• Macro
    whole. 2. What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? Consumer surplus is money buyers would be willing to spend to buy a good above what they must pay at the current price; and...
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  • Eco-111 Wa2
    happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? When a product is taxed both consumer and producer surplus drop. This change in surplus is gained in tax revenue, but producers earn less and...
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  • Eco 110
    . What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? 3. How do the elasticities of supply and demand affect the deadweight loss of a tax? Why does this effect occur? 4. What does the...
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  • Time Management Journal
    transfer surplus back to producers or consumers, or both, or to people outside of the market. A tax on buyers.   What happens if the tax is imposed on buyers instead of sellers? Surprisingly, the outcome is exactly the same. Suppose California enacts a sales tax of $0.20, which the buyer must pay for...
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  • Economics Course Test
    there is an early freeze in California that ruins the lemon crop. What happens to consumer surplus in the market for lemons? a.|It increases.| b.|It decreases.| c.|It is not affected by this change in market forces.| d.|It increases very briefly then decreases.| This table refers to five...
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  • Krugman
    changes in total surplus to measure the deadweight loss of taxes ➤ How much am I willing to pay for that used textbook? What information do we need to calculate consumer and producer surplus? The answer, surprisingly, is that all we need are the demand and supply curves for a good. That is, the...
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  • Recrystallization
    quantity sold will be smaller if there was no tax. C. How a Tax Affects Market Participants 1. We can measure the effects of a tax on consumers by examining the change in consumer surplus. Similarly, we can measure the effects of the tax on producers by looking at the change in producer surplus...
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  • Tax Ph
    - CHAPTER 8 APPLICATION: THE COSTS OF TAXATION 173 KEY CONCEPT deadweight loss, p. 163 QUESTIONS FOR REVIEW 1. What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? Explain. 2. Draw a...
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  • Microeconomics
    revenue starts to fall. CHAPTER 8 APPLICATION: THE COSTS OF TAXATION KEY CONCEPT deadweight loss, p. 163 QUESTIONS FOR REVIEW 1. What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax...
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  • Microeconomics
    intersection of the new (after the adjustment for tax) demand and supply curves. 7. The consumer always pays the bigger price, and the producer receives the lower price. 8. Tax revenue comes out of consumer and producer surplus. How much comes from each depends on the tax incidence. 9...
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  • Miss
    Taxation PA R T T H R E E S U P P LY A N D D E M A N D I I : M A R K E T S A N D W E L FA R E Key Concepts deadweight loss, p. 165 Questions for Review 1. What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus...
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  • Econ 302 Study Guide
    . I is true, and II is false. When the government imposes a specific tax per unit on a product, changes in consumer surplus are ________ and changes in producer surplus are ________. Select one: a. positive; positive b. negative; positive c. negative; negative Correct d. positive; negative...
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  • Economics Text Book Chapter Summaries
    realized on most sales... only in those cases when the producer does not receive economic profit... does the producer not get producer surplus Most producers would be willing to accept a lower-than equilibrium price... if that is required to sell the product... This is why discounted-price...
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  • Summary Mankiw
    Raises Consumer Surplus • The consumer surplus is the area above the price and below the demand curve. So when the price falls, the area gets bigger. What Does Consumer Surplus Measure? • Consumer surplus measures the benefit that buyers receive from a good. So it's a good measure of economic...
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  • Ec Study Questions
    substantially drops. 4. (a) Explain the law of supply. (b) Why does the supply curve slope upward? (c) How is the market supply curve derived from the supply curves of individual producers? 5. (a) What are the determinants of supply? (b) What happens to the supply curve when any of these...
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  • Econ Review
    demand: Sellers pay the entire tax. *Keep in mind this is when the sellers are taxed. (?) Does this make sense logically? (?) What would the two graphs for these two situations look like? (hint: all you have to do is look at the change in price. If there is no change in price, that means that...
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  • Advanced Placement Microeconomics
    assume that two identical Elvis albums are available for sale, and no one buyer wants more than one, and the two will sell for the same price. Where does the bidding stop? $70 What is the consumer surplus of the two bidders? $30 for John and $10 for Paul—a total of $40. Using Demand Curve to Measure...
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  • Tax Impact
    demand, consumer surplus, producer surplus and government revenue. Without tax, market equilibrium is at point F. Because of $1 tax on cigarettes, the supply curve shift to the left from S0 to S1. Producer will set the price from P0 to P1. P1 shows how much price the consumer pays after tax is...
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  • Monopoly and Monopsony
    (consumer') surplus given b yA - B . Producer surplus falls by A + C, so there is a deadweight loss given by triangles B and C. Bilateral Monopoly What happens when a monopolist meets a monopsonist? Ifs hard to say. We call a market with only one seller and only one buyer a bilateral morropoly. If you...
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  • Notes of Economics
    less elastic the demand for that good. The more nearly horizontal the slope, the more elastic the demand. Applications of price elasticity of demand Relationship between PED and TR What will happen to firms’ revenues (and hence to consumer expenditures) if there is a change in price? The...
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