Preview

Economics

Satisfactory Essays
Open Document
Open Document
1741 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Economics
Chapter

4
Economic Efficiency,
Government Price
Setting, and Taxes

Prepared by:

Fernando & Yvonn Quijano
© 2009 Prentice Hall Business Publishing Economics Hubbard/O’Brien UPDATE EDITION.

Should the Government
Control Apartment Rents?
Learning Objectives
4.1 Distinguishing between the concepts of consumer surplus and producer surplus. 4.2 Understand the concept of economic efficiency. 4.3 Explain the economic effect of government imposed price ceilings and price floors.
4.4 Analyze the economic impact of taxes.
New York City has two million apartments, about one million of which are subject to rent control.
The other one million apartments have their rents determined in the market by the demand and supply for apartments. APPENDIX Use quantitative demand and supply analysis.

© 2009 Prentice Hall Business Publishing Economics Hubbard/O’Brien UPDATE EDITION.

2 of 33

Chapter 4: Economic Efficiency, Government Price Setting, and Taxes

Economic Efficiency, Government Price Setting, and Taxes

Price ceiling A legally determined maximum price that sellers may charge.
Price floor A legally determined minimum price that sellers may receive.

© 2009 Prentice Hall Business Publishing Economics Hubbard/O’Brien UPDATE EDITION

3 of 33

Chapter 4: Economic Efficiency, Government Price Setting, and Taxes

Learning Objective 4.1

Consumer Surplus and Producer Surplus

4.1

Consumer Surplus
Consumer surplus
The difference between the highest price a consumer is willing to pay and the price the consumer actually pays.
Marginal benefit
The additional benefit to a consumer from consuming one more unit of a good or service.

© 2009 Prentice Hall Business Publishing Economics Hubbard/O’Brien UPDATE EDITION

4 of 33

Chapter 4: Economic Efficiency, Government Price Setting, and Taxes

Learning Objective 4.1

Consumer Surplus and Producer Surplus
Consumer Surplus
FIGURE 4-1
Deriving the

You May Also Find These Documents Helpful

  • Good Essays

    Economics

    • 1459 Words
    • 6 Pages

    The economic system of capitalism involves the production and consumption of goods and services. Making a profit is the ultimate incentive (or reason)…

    • 1459 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Economics

    • 5343 Words
    • 23 Pages

    Examine the role of private-property competition and the profit motive in the free-market system. Consider the ways the United States does and does not have a free-market economy.…

    • 5343 Words
    • 23 Pages
    Satisfactory Essays
  • Powerful Essays

    Economics

    • 1409 Words
    • 6 Pages

    A procurement strategy in which a business seeks to find the most cost efficient location for manufacturing a product, even if the location is in a foreign country.…

    • 1409 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Economics

    • 1258 Words
    • 6 Pages

    A science that studies human behavior as a relationship between ends and scarce means which have alternative uses.…

    • 1258 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Economics

    • 718 Words
    • 3 Pages

    Name_________________________________ InelasticPartnershipCorporationSole ProprietorshipMonopolyOligopolySurplusShortageIncentiveWagner Act of 1935Collective BargainingBoycottAntitrustGross National Product (GNP)EquilibriumFree Enterprise SystemEntitlementsFiscal policyMonetary PolicyConsumer Price IndexEquilibrium PriceComplementsEffective Demand-…

    • 718 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Economics

    • 16334 Words
    • 66 Pages

    Those who have studied Latin know that the prefix “micro-“ means “small,” so it shouldn’t be surprising that microeconomics is the study of small economic units. The field of microeconomics is concerned with things like:…

    • 16334 Words
    • 66 Pages
    Powerful Essays
  • Good Essays

    Economics

    • 565 Words
    • 3 Pages

    |STATE OF NEW JERSEY DEPARTMENT OF LAW & PUBLIC SAFETY DIVISION ON CIVIL RIGHTS DOCKET NUMBER: FEDERAL CHARGE#: | | | |) | | |Frederick John Katz, III, |) |Verified Complaint | | |) |Received and Recorded | |COMPLAINANT, |) |Date: | | |) |Department of Law and Public Safety | |-vs- |) |Division on Civil Rights | | |) |By: Cassandra Jetter | |Ann Klien Forensic Center, |) | | | |) | | |RESPONDENT. |) | | | |) | | 1. The Complainant resides at: 115 Mount Olive Road Flanders, NJ 07836 MORRIS COUNTY 2. To the best of Complainant's knowledge and belief, the Respondent is known as: Ann Klien Forensic Center and is located at: 1337 Rahway Avenue Avenel, NJ 07001 MONMOUTH COUNTY 3.…

    • 565 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Economics

    • 2060 Words
    • 9 Pages

    Administered price: A price set not by the forces of demand and supply, but by some authority like the Government or a regulatory authority.…

    • 2060 Words
    • 9 Pages
    Good Essays
  • Better Essays

    ✓ The level of rent that is just sufficient to stimulate profitable new development in the market is called the replacement cost level of rent. ( tends to be the long-run equilibrium rent.…

    • 18572 Words
    • 75 Pages
    Better Essays
  • Satisfactory Essays

    Economics

    • 1014 Words
    • 5 Pages

    Monsters Inc is an entertaining children's movie about the city of Monstropolis which is centered around Monsters, Inc., the city's power company. Monsters, Inc. The story is about the lovable, blue giant monster named James P. Sullivan (Sulley) and his Cyclops wisecracking best friend short, green monster Mike Wazowski and what happens when the real world interacts with theirs in the form of a 2-year-old baby girl dubbed "Boo," who accidentally sneaks into the monster world with Sulley one night. And now it's up to Sulley and Mike to send Boo back in her door before anybody and especially two evil villains such as Sulley's main rival as a scarer chameleon-like Randall and Mike and Sulley's boss Mr. Waternoose the chairman and chief executive officer of Monsters, Inc.…

    • 1014 Words
    • 5 Pages
    Satisfactory Essays
  • Better Essays

    economics

    • 1050 Words
    • 5 Pages

    The purpose of this paper is to prepare a speech that will be provided to a number of reporters that are not well versed with economics. In this paper I will put emphasis on international trade and foreign exchange rates and how those affect the GDP, domestic markets, and students. I will also outline some of the benefits on goods and services that are imported from other countries and how those contribute to our economy in the United States.…

    • 1050 Words
    • 5 Pages
    Better Essays
  • Good Essays

    economics

    • 1917 Words
    • 8 Pages

    Our business is a service sector based project. It is an institute that aims to bring a difference in the youths and the following generations’ life. This institute will make it possible for everyone to come, polish their personalities and build their characters. We shall help others explore themselves and their hidden talents, sharpen their intellect and become socially more acceptable and eventually better sophisticated human beings.…

    • 1917 Words
    • 8 Pages
    Good Essays
  • Powerful Essays

    economics

    • 7423 Words
    • 26 Pages

    In the name of ALLHA ALMIGHITY the lord of the world who has bestowed us with abilities and blessed with knowledge so that we can make best of opportunities provide to us. First of all we are indebted toward ALLHA ALMIGHTY who has created us and made capable enough to with stand in the competitive world.…

    • 7423 Words
    • 26 Pages
    Powerful Essays
  • Powerful Essays

    economics

    • 1971 Words
    • 9 Pages

    and inclusive growth in many parts of the country. MMFSL has extended loans to over 2…

    • 1971 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    example

    • 1569 Words
    • 5 Pages

    The simulation in the text is about a small city by the name of Atlantis. Atlantis is a well-maintained city with many positive aspects for the community. All of the aspects make it a pleasant living environment. For example, the city has maintained streets, maintained sidewalks, large parks and jogging paths. To rent an apartment in the community of Atlantis an individual would have to go through Good life Management. The current vacancy rate is at 28 percent of availability. The principles of microeconomics and macroeconomics help to explain why vacancy decreases to 15 percent. Knowing this information helps the rental company understand supply and demand curves. The supply and demand curves advise when to lower or raise the rent. This paper will discuss how the price elasticity of demand affects a consumer's purchasing and the firm's pricing strategy as it relates to the simulation.…

    • 1569 Words
    • 5 Pages
    Powerful Essays