Eco 10-24-07 - Econ notes 10/24/07 1. About the test a. MC...

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

View Full Document Right Arrow Icon
Econ notes 10/24/07 1. About the test a. MC b. Graphing c. Short Answer d. T/F e. Stuff to know i. Handout 1. that we never read 2. Opportunity cost ii. Cost 1. different types a. AFC b. AVC iii. Competitive firms 1. graphical iv. Exchange w/out production v. Applications of the neo-classical model 2. Taxes a. Applications of the Neo-Classical Model b. Suppose there is a per-unit tax of $1 on firms i. Start with classic supply and demand curve 1. P on Y axis 2. Q on X axis 3. S is upward sloping 4. D is downward sloping ii. The new supply curve shifts to the left, leading to a new equilibrium iii. The difference between the old equilibrium price and the new equilibrium price is paid by the consumers (above the line) 1. The rest is paid by the firm iv. A loss in value occurs 1. As a result of the tax, a dead weight loss (DWL) occur a. it’s the triangle that occurs between the old equilibrium point, the new equilibrium point, and the point where the new Quantity crosses the old supply curve
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 04/07/2008 for the course ECO 2302 taught by Professor Smith during the Spring '08 term at University of Texas at Dallas, Richardson.

Page1 / 2

Eco 10-24-07 - Econ notes 10/24/07 1. About the test a. MC...

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