How much consumers gain from consuming goods

Assignment Help Microeconomics

Reference no: EM13767095

Consumer Surplus

"Consumer surplus" represents the difference between what a consumer is willing to pay for a good or service and the price that they actually pay. In other words, the concept of consumer surplus indicates how much consumers gain from consuming goods and services at a specified price.

Now let's consider the case of a "consumer deficit" or the loss represented by consumers who exist at the opposite end of the demand curve. These are those persons who cannot afford to consume any goods or services at the specified price.

To address such a consumer loss, imagine that you are now tasked with imposing a "surplus tax" on consumers through the addition of an individual sales tax which will be added to the market price of certain goods and services. The proceeds from such a tax will be used to compensate an equal number of those consumers at the bottom of the demand curve, thereby, giving them the opportunity to consume such goods and services which they otherwise would not have been able to purchase at the specified price.

What would be the various consequences of this tax on both consumption as well as production?

In your response, provide examples and analysis to justify your conclusions. Quotations, paraphrases, and ideas you get from books, articles, or other sources of information should be cited using APA style.

Reference no: EM13767095

Questions Cloud

One hollow sphere with inner and outer radii : Suppose you have one hollow sphere with inner and outer radii 0.4m and 1.8m, and a second with inner and outer radii 1.4ft and 2.1ft. How many more cubic yards of material does the bigger hollow sphere have? Your answer should be in cubic yards. Form..

What are some problems you would expect to encounter : What are some problems you would expect to encounter if you were in charge of providing rehabilitation in a county jail

Quality of object-oriented language : The quality of a language that allows a programmer to express a computation clearly, correctly, concisely, and quickly is called.

The generic pharmaceuticals industry : Analyze the opportunites for Teva in innovative pharmaceutical and biosimilars.

How much consumers gain from consuming goods : The concept of consumer surplus indicates how much consumers gain from consuming goods and services at a specified price - difference between what a consumer is willing to pay for a good or service and the price that they actually pay.

Discuss any changes you would make to the policy : Research a current health policy of your choice and discuss why you find it relevant to you personally and the population. You may also discuss any changes you would make to the policy

Examples of illegal employment questions : List five examples of illegal employment questions. [Use credible sources]. For each example, why do you think these questions are or are not legal to ask prospective employees?

What is lawyering for a social change : What is lawyering for a social change, According to Ms. Loewy, opponents of lawyering for a social change have two main contentions in regard to this type of lawyering. Identify and explain these two contentions

Diferentiate losles and losy algorithms : Write briefly about he Computer System Components. Diferentiate losles and losy algorithms

User Account

All Pages