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