econ

formula to calculate consumer or producer surplus from a graph

1/2bh

Why is improving agricultural technology good for consumers and bad for farmers?

Demand for food is relatively inelastic, so revenue will decrease for farmers

producer surplus = _____________

amount received by sellers - cost to sellers

rent ceilings on housing _________________

are in effect in most US cities and states to control housing prices

In the US, the major source of tax revenue for the Federal government is ______________

income tax, and for state and local governments it is sales and property tax

increase in unemployment, high prices for products manufactured by low-skill workers, marginal sellers of those products, and reduced fringe benefits for those workers are unintended consequences of ______________

minimum wage increase

Price elasticity of demand formula

percent change in quantity demanded / percent change in price

If the price increases and production technology improves, _______________.

price is ambiguous and quantity will increase

What causes a change in QUANTITY DEMANDED?

price of a good

another name for producer surplus is ___________

profit

increasing gasoline prices will cause consumers to ______________

reduce their quantity demanded more in the long run than in the short run

When a good is taxed, which side of the market bears the majority of the burden of the tax?

the side with fewer good alternatives

consumer surplus = _____________

value to buyers - amount paid by buyers

total surplus = ____________

value to buyers - cost to sellers

What kinds of markets minimize deadweight loss from taxation?

when demand or supply is relatively elastic