Microeconomics - Take Home Quiz

Microeconomics - Take Home Quiz - – The reduction in...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ112 – Principles of Microeconomics Spring 2008 Take – Home Quiz / Assignment on Chapter 4 Prof. Maria I. Ramirez 1. Define the following concepts: Consumer Surplus – The difference between the highest price a consumer is willing to pay and the price the consumer actually pays. Producer Surplus – The difference between the lowest price a firm would have been willing to accept and the price it actually receives. Economic Surplus – The sum of consumer surplus and producer surplus. Price Ceiling – A legally determined maximum price that sellers may charge. Price Floor – A legally determined minimum price that sellers may receive. Deadweight Loss
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: – The reduction in economic surplus resulting from a market not being in competitive equilibrium. • Tax Incidence – The actual division of the burden of a tax between buyers and sellers in a market. 2. Using the following Demand and Supply functions: Qs = 10 + 1/2P; Qd = 100 – 2P Calculate the equilibrium price (P) and quantity (Q) in a competitive market. 3. Draw a demand and supply graph based on the foregoing problem. Indicate the areas of consumer surplus and producer surplus at the market equilibrium. 4. If the government sets a price floor (P2) at $40, will there be shortage or a surplus? Is there a deadweight loss? A:...
View Full Document

{[ snackBarMessage ]}

Page1 / 2

Microeconomics - Take Home Quiz - – The reduction in...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online