Econ11Fall2007NotesForLecture_8Oct1

Econ11Fall2007NotesForLecture_8Oct1 - Lecture VIII Notes...

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Lecture VIII Notes Oct 1, 2006, Problem Set #2 Due Wed I. Review: Analysis of Subsidies Using S & D II. Own Price Elasticity of Demand III. Income Elasticity of Demand IV. Cross Price Elasticity of Supply V. Supply Elasticity VI. Begin Consumer’s Demand Theory I. Review: Analysis of Subsidies - Higher Education A. GWU issues tax-exempt debt, gifts to GWU are tax deductible and GWU pays no property tax or corporate tax B. Subsidy shifts the gross of subsidy supply down C. Equilibrium is found at the intersection of the gross of subsidy supply and demand curves 1.Welfare triangle is based on the increase in education above the initial market equilibrium. 2.Gross of subsidy price is lower and this gives rise to a part of the subsidy received by students (like you). 3. Net of subsidy price is higher and this gives rise to a part of the subsidy received by college faculty! Tuition S NetOfSubsity S GrossOfSusidy Demand S* S’ Students T Net T* T G
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II. Own-Price Elasticity of Demand A. Own Price Elasticity = %?Q/%?P =response of Q
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This note was uploaded on 04/18/2008 for the course ECON 011 taught by Professor Yezer during the Fall '07 term at GWU.

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Econ11Fall2007NotesForLecture_8Oct1 - Lecture VIII Notes...

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