Menu_21_Feb_11

Menu_21_Feb_11 - TODAYS MENU: Monday 21 February 2011 I....

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

View Full Document Right Arrow Icon
TODAY’S MENU: Monday 21 February 2011 I. BUSINESS A. Practice Problems 1. Chapter 8: 1, 3, 7-13, 16, 20 2. Chapter 12: 1-3, 7-10, 12, 15 II. SUBSTANCE when tax is put on goods its distributed in 2 ways A. Incidence of taxation 1. Tools a. Elasticity b. Economic surplus i. Consumer surplus + Difference willing and able to pay and the price they have to pay. Tax shrinks. ii. Producer surplus + Difference of price received and the price they would of gotten iii. Government revenue + Amount of tax * quantity sold Burden of tax= buyers and sellers; how much buyers/ sellers burden iv. Deadweight loss The amount of what would have been consumer surplus and quantity supplies but due to quantity decreasing—it doesn’t exist. Net loss of economic surplus as a result of taxes DL= f (size of tax, + price elasticity of demand, elasticity of demand) -More sensitive to price; buying more/buying less ; reduce amount buy -More sensitive consumer change to price, the more they change the amount they sell, the
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/14/2012 for the course ECON 2030 taught by Professor Bong during the Fall '07 term at LSU.

Page1 / 3

Menu_21_Feb_11 - TODAYS MENU: Monday 21 February 2011 I....

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