2 Reading Assignment for the Week: Finish Chapter 2 Chapter Copyright 2012 Pearson Addison-Wesley. All rights reserved.
3 Topics 1. Demand. 2. Supply. 3. Market Equilibrium. 4. Shocking the Equilibrium. 5. Effects of Government Interventions. 6. When to Use the Supply-and-Demand Model. 2-3 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
4 Demand: Determinants of Demand The following factors determine the demand for a good: Price of the good Tastes Information Prices of other goods Complements and substitutes Income Government rules and regulations (taxes) Other factors 2-4 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
5 Demand: The Demand Curve Quantity demanded - the amount of a good that consumers are willing to buy at a given price, holding constant the other factors that influence purchases. Demand curve - the quantity demanded at each possible price, holding constant the other factors that influence purchases 2-5 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
6 p, $ per kg Figure 2.1 A Demand Curve Demand curve for pork, D 1 Law of Demand consumers demand more of a good the lower its price, holding constant all other factors that influence consumption Q, Million kg of pork per year 2-6 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
7 p, $ per kg Figure 2.2 A Shift of the Demand Curve Effect of a 60 increase in the price of beef 3.30 D 2 D Q, Million kg of pork per year 2-7 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
8 The Demand Function The processed pork demand function is: Q = D(p, p b, p c, Y) where Q is the quantity of pork demanded p is the price of pork (dollars per kg) p b is the price of beef (dollars per kg) p c is the price of chicken (dollars per kg) Y is the income of consumers (thousand dollars) 2-8 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
9 From the Demand Function to the Demand Curve Estimated demand function for pork: Q = p + 20p b + 3p c + 2Y Using the values p b = 4, p c = 3.33 and Y = 12.5, we have Q = p which is the linear demand function for pork. 2-9 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
10 p, $ per kg From the Demand Function to the Demand Curve (cont.) Q = p Demand curve for pork, D 1 If p = $3.30 then, In If If pgeneral, If decreases pp increases = 0, then by $1 by Q = 220 (to $1 $2.30) 286 (to $4.30) then, D Q = -20D p Q = 240 = then, slope D p Q = Q, Million kg of pork per year 2-10 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
11 Summing Demand Curves The total demand shows the total quantity demanded at each price The total quantity demanded at a given price is the sum of the quantity each consumer demands at that price Q = Q 1 + Q 2 = D 1 (p) + D 2 (p) 2-14 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
12 Application Aggregating the Demand for Broadband Service 2-15 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
13 Supply: Determinants of Supply The following factors determine the supply for a good: Price of the good Costs Government rules and regulations 2-16 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
14 Supply: The Supply Curve Quantity supplied - the amount of a good that firms want to sell at a given price, holding constant other factors that influence firms supply decisions, such as costs and government actions Supply curve - the quantity supplied at each possible price, holding constant the other factors that influence firms supply decisions 2-17 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
15 p, $ per kg Figure 2.3 A Supply Curve An increase in the price 5.30 Supply cu rve, S causes a movement along the curve and an increase in the quantity supplied. 300 Q, Million kg of pork per year 2-18 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
16 p, $ per kg Figure 2.4 A Shift of a Supply Curve A $0.25 increase in the price of hogs.. shifts the supply curve to the left S 2 S reducing the quantity supplied at the previous price Q, Million kg of pork per year 2-19 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
17 The Supply Function The processed pork supply function is: Q = S(p, p h ) where Q is the quantity of pork supplied p is the price of pork (dollars per kg) p h is the price of a hog (dollars per kg) 2-20 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
18 From the Supply Function to the Supply Curve Estimated supply function for pork: Q = p 60p h Using the values p h = $1.50 per kg Q = p. What happens to the quantity supplied if the price of processed pork increases by Δp = p 2 p 1? 2-21 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
19 Summing Supply Curves The total supply curve shows the total quantity produced by all suppliers at each price Horizontal sum of each producer s supply curve Sum of all quantities supplied at a given price 2-22 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
20 Figure 2.5 Total Supply: The Sum of Domestic and Foreign Supply 2-23 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
21 Market Equilibrium Equilibrium - a situation in which no one wants to change his or her behavior equilibrium price is the price at which consumers can buy as much as they want and sellers can sell as much as they want equilibrium quantity is the quantity bought and sold at the equilibrium price 2-26 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
22 Market Equilibrium (cont.) Excess demand the amount by which the quantity demanded exceeds the quantity supplied at a specified price. Excess supply the amount by which the quantity supplied is greater than the quantity demanded at a specified price 2-27 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
23 p, $ per kg Figure 2.6 Market Equilibrium Above the equilibrium price. Market equilibrium point! Excess supply = e S Below the equilibrium price. Excess demand = 39 is below the quantity demanded D is below the quantity supplied the quantity supplied the quantity demanded Q, Million kg of por k per year 2-28 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
24 Using Math to Determine the Equilibrium Demand: Q d = p Supply: Q s = p Equilibrium: Q d = Q s p = p 60p = 198 P = $3.30 Q = (3.3) = Copyright 2012 Pearson Addison-Wesley. All rights reserved.
25 Shocking the Equilibrium The equilibrium changes only if a shock occurs that shifts the demand curve or the supply curve. These curves shift if one of the variables we were holding constant changes (e.g., income, other prices, tastes & preferences, etc.) Copyright 2012 Pearson Addison-Wesley. All rights reserved.
26 p, $ per kg Figure 2.7a Equilibrium Effects of a Shift of a Demand Curve A $0.60 increase in the price of beef shifts demand outward Which puts an upward pressure on the price to a new equilibrium e 1 e 2 S D 2 Excess demand = 12 D 1 At the original price there is now excess demand Q, Million kg of pork per year 2-32 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
27 p, $ per kg Figure 2.7b Equilibrium Effects of a Shift of a Supply Curve A $0.25 increase in the price of hogs shifts the supply curve to the left Which puts an upward pressure on the price to a new equilibrium e 2 e 1 S 2 S 1 Excess demand = 15 D At the original price there is now excess demand Q, Million kg of pork per year 2-33 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
28 Equilibrium Effects of Government Interventions Government action can cause a shift in the supply curve, the demand curve, or both the quantity demanded to be different from quantity supplied 2-36 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
29 Equilibrium Effects of Government Interventions (cont.) Policies that shift supply curves Licensing laws, quotas Policies that cause demand to differ from supply Price ceilings: The maximum price at which the good can be sold at. Only effective if set below the equilibrium price. Price floors: This is the minimum price at which the good can be sold at. Only effective if set above the equilibrium price Copyright 2012 Pearson Addison-Wesley. All rights reserved.
30 Figure 2.8 A Ban on Rice Imports Raises the Price in Japan p, Price of rice per pound p 2 e 2 p 1 S (ban) A ban on rice imports shifts the total supply of rice in Japan e 1 S (no ban) which causes the equilibrium to change and the price to increase. Q 2 Q 1 D Q, Tons of rice per year 2-38 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
31 p, $ per gallon Figure 2.9 Price Ceiling on Gasoline Supply shifts to the left. S 1 but gas stations must continue to charge a price of p 1.. p 1 =p e 1 Price ceiling D which creates excess demand. Q s Excess demand Q 1 = Q d Q, Gallons of gasoline per month 2-41 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
32 Solved Problem 2.5 Suppose that there is a single labor market in which everyone is paid the same wage. If a binding minimum wage, w, is imposed, what happens to the equilibrium in this market? Answer: Show the initial equilibrium before the minimum wage is imposed. Draw a horizontal line at the minimum wage, and show how the market equilibrium changes Copyright 2012 Pearson Addison-Wesley. All rights reserved.
33 Figure 2.10 Price Floor Example (Minimum Wage) 2-43 Copyright 2012 Pearson Addison-Wesley. All rights reserved.
34 Why Supply Need Not Equal Demand The quantity that firms want to sell and the quantity that consumers want to buy at a given price need not equal the actual quantity that is bought and sold. Example: price ceiling Copyright 2012 Pearson Addison-Wesley. All rights reserved.
2-1 Copyright 2012 Pearson Education. All rights reserved. Chapter 2 Read this chapter together with unit 1 and 2 in the study guide Supply and Demand Topics 1. Demand. 2. Supply. 3. Market Equilibrium.
Chapter 4 Demand, Supply and Markets These slides supplement the textbook, but should not replace reading the textbook 1 What is a market? A group of buyers and sellers with the potential to trade 2 What
DEMAND AND SUPPLY Chapter 3 Principles of Macroeconomics by OpenStax College is licensed under a Creative Commons Attribution 3.0 Unported License Demand for Goods and Services Demand refers to the amount
Chapter 3 Applying the Supply-and- Demand Model Reading Assignment for Week: Finish Chapter 3 Chapter 9 (sections 9.2, 9.3, 9.4) Chapter 13 (first few pages through section 13.1) 3-2 Topic How the shapes
Chapter 8 Competitive Firms and Markets Topics Perfect Competition. Profit Maximization. Competition in the Short Run. Competition in the Long Run. 8-2 Copyright 2012 Pearson Addison-Wesley. All rights
Name: ID: A Exam 01 - ECON 2301-05 - Friday, October 1st 1. Demand is said to be inelastic if the a. quantity demanded changes proportionately the same as price. b. quantity demanded changes proportionately
Policies that cause demand to differ from supply (Price Ceiling) Economic Analysis about Price Ceiling The Welfare Costs of Rationing by Waiting by Deacon, Robert T and Sonstelie, Jon (1989, Economic Iquiry)
EC 131 - Principles of Microeconomics Instructor: Inacio G L Bo Answer the questions in the spaces provided on the question sheets. If you run out of room for an answer, continue on the back of the page.
DEMAND Economics Unit 2 Just the Facts Handout What is Demand? A market is a place where people buy and sell things. A market has two sides. There is a buying side and a selling side. The buying side of
Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important
Chapter 2 Supply and Demand SOLUTIONS TO END-OF-CHAPTER QUESTIONS DEMAND 1.1 When the price of coffee changes, the change in the quantity demanded reflects a movement along the demand curve. When other
Resource Markets 1 Demand & Supply of Resources Resource demand Firms demand resources As long as marginal revenue exceeds marginal cost To maximize profit Resource supply People supply resources To the
CHAPTER 1. FUNCTIONS AND CHANGE 18 1.4 Applications of Functions to Economics Definition. The cost function gives the total cost of producing a quantity of some good. The standard notation is: q = quantity,
Class 7 Class Agenda 1. Finish discussion on consumer and producer surplus (welfare theory). 2. Elasticity problems (individual/group work to prep for quiz). 3. Quiz #1. Note: As you hand-in your quiz,
FIRST MIDTERM EXAMINATION ECON 200 Spring 2007 STUDENT'S NAME: STUDENT'S IDENTIFICATION NUMBER: DAY AND TIME YOUR SECTION MEETS: BEFORE YOU BEGIN PLEASE MAKE SURE THAT YOUR EXAMINATION HAS BEEN DUPLICATED
Basics of Economics Alvin Lin Principles of Microeconomics: August 2016 - December 2016 1 Markets and Efficiency How are goods allocated efficiently? How are goods allocated fairly? A normative statement
Microeconomics: Principles, Applications, and Tools NINTH EDITION Chapter 6 Market Efficiency and Government Intervention The housing market in New York City is highly regulated. The city issues a relatively
The Foundations of Microeconomics D I A N N A D A S I L V A - G L A S G O W D E P A R T M E N T O F E C O N O M I C S U N I V E R S I T Y O F G U Y A N A S E P T E M B E R 1 4, 2 0 1 7 Lecture 3... INTRODUCTION
CHAPTER 3 SUPPLY AND DEMAND: AN INITIAL LOOK 1. This question is intended to help students develop an intuitive sense of the origins of the demand curve. If you deal with this question in class or discussion
Duration: 50 minutes Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester ECON101 - Introduction to Economics I Quiz 2 Answer Key 16 December
HW #1: olutions QUETION FOR REVIEW 1. uppose that unusually hot weather causes the demand curve for ice cream to shift to the right. Why will the price of ice cream rise to a new market-clearing level?
1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. The two things needed for demand to exist are: willingness
Chapter 4: The Market Forces of Supply and Demand What factors affect buyers demand for goods? What factors affect sellers supply of goods? How do supply and demand determine the price of a good and the
Test Bank for Managerial Economics and Strategy 2nd Edition by Perloff Link full download: https://testbankservice.com/download/test-bankfor-managerial-economics-and-strategy-2nd-edition-by-perloff/ Managerial
CHAPTER 2 Demand and Supply The Supply_and_demand model A model for understanding the determination of the price of quantity of a good sold on the market Two groups: buyers and sellers Types of Competition
Mr Sydney Armstrong ECN 1100 Introduction to Microeconomic Lecture Note (3) Individual & Market Demand and Supply The tools of demand and supply can take us a far way in understanding both specific economic
Problem Set 5 I. 1. The government has decided that the free-market price of cheese is too low. a) Suppose the government imposes a binding price floor in the cheese market. Draw a supply-and-demand diagram
Name Test Form A Economics 1 Final Exam December 9, 2008 True-False Questions: Fill in Bubble A for True, Bubble B for False. 1. A profit-maximizing monopolist will sell more units of a good than the amount
Applications of supply and demand Comparative statics and government policy Comparative statics The simple supply and demand model we have developed can be used to analyze the effects of many events on
ECON 202 - MACROECONOMIC PRINCIPLES Instructor: Dr. Juergen Jung Towson University J.Jung Chapter 2-4 - Micro Basics Towson University 1 / 51 Disclaimer These lecture notes are customized for the Macroeconomics
C H A P T E R 9 The Analysis of Competitive Markets Prepared by: Fernando & Yvonn Quijano CHAPTER 9 OUTLINE 9.1 Evaluating the Gains and Losses from Government Policies Consumer and Producer Surplus 9.2
2. Demand and Supply The following materials are taken from Chap. 3 to Chap. 7 of Economics, 2 nd ed., Krugman and Wells(2009), Worth Palgrave MaCmillan. 1 of 42 2. Demand and Supply, and Market Equilibrium
Queen s University epartment of Economics ECON 111*S Suggested Solutions to Take-Home Midterm Examination February 7, 2007 Instructor: Sharif F. Khan Page 1 of 9 Pages PART A TRUE/FALSE/UNCERTAIN QUESTIONS
Getting ready for the AP Macroeconomics Exam Lesson 2 Quantity S / D vs. Supply and Demand, Law of Supply and Demand, Reasons for Change of Supply and Demand How does a demand schedule differ from a market
Macro Unit 1b Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. Notice that the remainder of this unit assumes
Microeconomics 8th Edition Perloff SOLUTIONS MANUAL Microeconomics 8th Edition Perloff TEST BANK Full download at: Full download at: https://testbankreal.com/download/microeconomics-8th-edition-perloffsolutions-manual/
Chapter 9 The Instruments of Trade Policy Preview Partial equilibrium analysis of tariffs in a single industry: supply, demand, and trade Costs and benefits of tariffs Export subsidies Import quotas Voluntary
Chapter 11 Monopoly Topics Monopoly Profit Maximization. Market Power. Welfare Effects of Monopoly. Cost Advantages That Create Monopolies. Government Actions That Create Monopolies. Government Actions
Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The point on a business cycle when real gross domestic product stops rising and begins falling is a(n):
Castle Got the answer? Be the first to stand with your group s flag. Market Equilibrium 3.1 Question 1: Define market equilibrium. Got it correct? MAKE or BREAK a castle, yours or any other group s. The
PowerPoint to accompany Chapter 2 Markets, Demand and Supply Learning Objectives 2.1 Economic systems How do countries differ in the way their economies are organised? 2.2 Demand How much will people buy
Outlining the Look over the chapter for an overview of the material. Pay attention to the main topics in the book. As you look over each section of the book, fill in the missing words in the outline below.
SCHS SOCIAL STUDIES What you need to know UNIT TWO 1. Explain how supply and demand create balance in the marketplace 2. Explain how a market reacts to a fall in supply by moving to a new equilibrium 3.
Chapter 4: Demand Section 2 Objectives 1. Explain the difference between a change in quantity demanded and a shift in the demand curve. 2. Identify the factors that create changes in demand and that can
Economics 101 Problem Set 3 Due: September 20, 2018 by 5 PM To receive credit for this problem set, you must submit your answers on-line at the class webpage. Neither hard copies nor e-mails will be accepted.
Government Policy, Efficiency, and Welfare Econ 102: Introduction to Microeconomics 1 1.1 Goals of today s class Goals of today s class Learn about consumer surplus and producer surplus, a convenient way
EXAM 2: Professor Walker - S201 - Fall 2008 I. (3 Points Each) Multiple Choice 1. Leisure Hours Grades 10 80 15 40 20 20 The tradeoff shown in the PPF table above depicts A. decreasing per unit O.C. of
Chapter 5 Price SS p f This chapter will be built on the foundation laid down in Chapters 2 and 4 where we studied the consumer and firm behaviour when they are price takers. In Chapter 2, we have seen
9.1 Zero Profit for Competitive Firms in the Long Run Chapter 9 Applications of the Competitive Model With Free Entry into the Market Along with identical costs and constant input prices, implies firms
! Midterm 2 Sample uestions Use the demand curve diagram below to answer the following THREE questions. 8 6 4 2 4 8 12 16 1. What is the own-price elasticity of demand as price decreases from 6 per unit
Chapter 4 Demand and Supply 4.1 Demand 1) What is the "quantity demanded"? A) the amount of a good people desire B) the amount of a good people are able and willing to buy during a specific time period
Demand and Supply Chapter 2 pages 18-24, 27-3-, 33-34 Markets Market- where buyers and sellers come together to carry out an economic transaction Markets can be physical places where goods/services are
Econ 111 Practice Midterm 1 The exam has a total of 50 questions (100 points). You will have 75 minutes to complete the exam. Good Luck! Print your Name Sign the honor Pledge affirming that you have neither
ECON 203 Homework #1 Solutions 2. Use supply and demand curves to illustrate how each of the following events would affect the price of butter and the quantity of butter bought and sold: a. An increase
C H A P T E R 2 The Basics of Supply and Demand Prepared by: Fernando & Yvonn Quijano CHAPTER 2 OUTLINE 2.1 Supply and Demand 2.2 The Market Mechanism 2.3 Changes in Market Equilibrium 2.4 Elasticities
Chapter 5: Supply Section 3 Objectives 1. Explain how factors such as input costs create changes in supply. 2. Identify three ways that the government can influence the supply of goods. 3. Analyze other
Economics Unit 2 TEACHER WHAT IS DEMAND? CHAPTER 4.1 What is demand? THE DESIRE, ABILITY, AND WILLINGNESS TO BUY A PRODUCT. What is microeconomics? THE AREA OF ECONOMICS THAT DEALS WITH BEHAVIOR AND DECISION
, Fall 2013 Your exam will have two parts covering the topics in chapters 4 (page 91 through end of chapter), 5 and 6 from the Parkin chapters and chapter 10 (up to page 317, up to but not including the
Supply, Demand, and Government Policies Copyright 2004 South-Western Supply, Demand, and Government Policies In a free, unregulated market system, market forces establish equilibrium prices and exchange
Topic 4 test MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) There is a deadweight loss if the last unit produced has a A) marginal benefit greater
Principles of Microeconomics Exam Notes Week 1: Introduction to Microeconomics Learning objectives - Understand how to think like an economist - Understand the concepts of tradeoff, opportunity cost, and
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015 16 Spring Semester ECON101 Introduction to Economics I First Midterm Exam Duration: 90 minutes Answer Key
Microeconomics, marginal costs, value, and revenue, final exam practice problems (The attached PDF file has better formatting.) *Question 1.1: Effects on Marginal Cost Which of the following is most likely
Econ 101: Principles of Microeconomics Ch. 3: Supply and Demand: A Model of a Competitive Market Fall 2010 Herriges (ISU) Chapter 3: Supply and Demand Fall 2010 1 / 37 Outline 1 The Demand Curve Building
Economics 2 Spring 2018 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 2 1.a. In this problem we are dividing everything the household buys into two categories child care
William M. Boal Signature: Printed name: EXAMINATION 2 VERSION B "Applications of Supply and Demand" October 12, 2016 INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted,
CIE Economics AS-level Topic 2: Price System and the Microeconomy a) Demand and supply curves Notes Demand: Effective demand is the quantity that consumers are willing to buy at the current market price.
Chapter 2: The Basic Theory Using Demand and Supply Multiple Choice Questions 1. If an individual consumes more of good X when his/her income doubles, we can infer that a. the individual is highly sensitive
ECON 120 SAMPLE QUESTIONS 1) The price of cotton clothing falls. As a result, 1) A) the demand for cotton clothing decreases. B) the quantity demanded of cotton clothing increases. C) the demand for cotton
William M. Boal Signature: Printed name: EXAMINATION 2 VERSION A "Applications of Supply and Demand" October 12, 2016 INSTRUCTIONS: This exam is closed-book, closed-notes. Simple calculators are permitted,
SOLUTIONS TO TEXT PROBLEMS 6 Quick Quizzes 1. A price ceiling is a legal maximum on the price at which a good can be sold. Examples of price ceilings include rent control, price controls on gasoline in
Chapter 4 Extensions of Demand and Supply Analysis Introduction Water covers 71% of the Earth, but only 2.5% is fresh water. People in many locales complain of shortages of safe drinking water. In this
Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no
The Market Forces of and Demand Chapter 4 All rights reserved. Copyright 21 by Harcourt, Inc. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department,
Microeconomics: Theory and Applications with Calculus, 4e (Perloff) Chapter 2 Supply and Demand 2.1 Demand 1) Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 -.25p + 4pc, where
Lecture # 2 -- The Basics of Supply and Demand I. The Market Mechanism A market is the collection of buyers and sellers that, through their actions or potential interactions, determine the price of a product
Chapter 6 Economies of Scale, Imperfect Competition, and International Trade Slides prepared by Thomas Bishop Copyright 2009 Pearson Addison-Wesley. All rights reserved. Preview Types of economies of scale
Chapter 3 MODERN PRINCIPLES OF ECONOMICS Third Edition Supply and Demand Outline The Demand Curve for Oil Consumer Surplus What Shifts the Demand Curve? The Supply Curve for Oil Producer Surplus What Shifts
2/29 Outline Introduction ciency xcise Tax Subsidy 3/29 Where have we come from? Part I I Consumers have a set of preferences over a basket of goods I Consumers choose the basket of goods that is a ordable
roblem et #3 Answers Economics 26H, John L. Turner 1. (a) upply (b) Equilibrium: *=5, *= emand 5 upply Curve given the tax (slope still Original upply Curve (d) New equilibrium: *=4, *=80 80 60 4 5 emand