What is the total expenditure in market

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Reference no: EM13743359

Define the following terms

1. Consumer Surplus

2. Deadweight Loss

3. Excise Tax

4. Externality

5. Market Failure

6. Minimum Wage

7. Price Ceiling

8. Price Floor

9. Producer Surplus

10. Public Good

11. Subsidy

Discussion Questions:

1. When we decide to impose a tax, we must weigh the marginal benefits and marginal costs associated with the taxation. Identify the marginal costs and marginal benefits of imposing a tax on the production of cigarettes. Answer this question by completing the table below.

2. What are the costs and benefits of imposing a subsidy to farmers for agriculture production. Answer this question by completing the table below.

3. How does taxation and subsidies result in a redistribution of wealth from one group of people to another.

Graphic Analysis Questions

1. On the graph below, illustrate the consumer surplus and producer surplus created by the market.

2167_Explain why the supply shifted to the left.png

2. The total consumer surplus created by the cheeseburger market is _________________

3. The total producer surplus created by the cheeseburger market is _________________

4. The next graph illustrates a price ceiling of $3.00. Illustrate the consumer surplus, the producer surplus, and the deadweight loss created by the regulation.

758_Explain why the supply shifted to the left1.png

5. What is the new amount of output as a result of this regulation? _____________

6. Did output increase or decrease? __________________

7. What is the amount of the shortage created by this price ceiling? _________________

8. Calculate the consumer surplus after the regulation? _______________

9. Calculate the producer surplus after the regulation? _______________

10. Compare your answers from 8 and 9 to your answers from 2 and 3. Which group is better off as a result of a price ceiling? ____________________

11. Calculate the deadweight loss associated with the price ceiling. ___________________

12. The next graph illustrates a price floor of $7.00. Illustrate the consumer surplus, the producer surplus, and the deadweight loss created by the regulation.

1992_Explain why the supply shifted to the left2.png

13. What is the new amount of output as a result of this regulation?

14. Did output increase or decrease?

15. What is the amount of the surplus created by this price floor?

16. Calculate the consumer surplus after the regulation?

17. Calculate the producer surplus after the regulation?

18. Compare your answers from 16 and 17 to your answers from 2 and 3. Which group is better off as a result of a price floor?

19. Calculate the deadweight loss associated with the price floor.

20. The next graph illustrates an excise tax. Illustrate the consumer surplus, the producer surplus, the tax revenue and the deadweight loss created by the regulation.

70_Explain why the supply shifted to the left3.png

21. What is the new amount of output as a result of this regulation?

22. Did output increase or decrease?

23. What is the size of the tax illustrated by the graph above?

24. Calculate the consumer surplus after the regulation?

25. Calculate the producer surplus after the regulation?

27. Calculate the deadweight loss associated with the price floor.

28. Calculate the tax revenue generated by the excise tax.

29. The next graph illustrates an subsidized market for cheeseburgers. Illustrate the consumer surplus, the producer surplus, the tax revenue and the deadweight loss created by the regulation.

2434_Explain why the supply shifted to the left4.png

30. What is the price after the subsidy?

31. What is the quantity of transactions after the subsidy is implemented?

32. Explain why the supply shifted to the left (down)

33. Below is a graph of a market for healthcare with a health insurance co-pay. Use the graph to answer the following questions from the graph

2138_Explain why the supply shifted to the left5.png

34. What is the market price for a doctor's visit before an insurance copay is instituted?

35. How many doctor's visits will there be before the insurance copay is instituted?

36. As a result of a $10 copay, how many doctor's visits will there be?

37. How much will the insurance companies have to pay doctors to incentivize them to supply the increase amount of doctor's visits?

38. If you did not have the health insurance what would your price be after the copay is instituted?

39. Where does money for the extra insurance expenditures come from?

40. What is the total expenditure in this market before the copay is instituted?

41. What is the total expenditure in this market after the copay is instituted?

Reference no: EM13743359

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