Show graphically the changes in Producer Surplus, Consumer
Surplus, Deadweight Loss and Government Tax Revenue when the
government institutes a Tariff on imports? If the economy is a
large economy show graphically an optimal tariff.
Explain and graph the effect on 1. consumer surplus, 2.Supplier
surplus, 3. how a dead weight loss occurs when a price floor and
ceiling is imposed by a govenrment regulation. Define the three
concepts mentioned and explain the effect of the two price
regulations upon those three concepts.
With aids of graph, define consumer & producer surplus. Then
show how the deadweight loss affects efficiency. 1- Consumer
surplus is 2- Producer surplus is 3- Govemment revenue 4-
Deadweight loss is 5- Total surplus is
a. Show on a demand supply graph how consumer surplus and
producer surplus is defined
b. In general to evaluate welfare effects we need to consider
the welfare of groups of individuals. What problem does consumer
surplus pose in this regard ?
c. There are to firms in an economy facing a upward sloping
supply curve in a perfectly competitive setting. Show graphically
how you would find the total producer surplus in the economy.
2. Consumer Surplus and Producer Surplus Explain in words and
graphically how consumer surplus, producer surplus and total
surplus change when the minimum wage is removed. Assume the minimum
wage is above the free market price. In your explanation please
interpret the components of the changes in consumer surplus,
producer surplus and total surplus; i.e. what each component
represents. For additional points, what happens if the minimum wage
is set below the free market price? please graph
True or False? Draw a graph to support your answer.
When unions play a decisive role in the labor market, the
dead-weight loss of payroll tax is high, and the revenue generated
by the tax is small.
Graph & label all the parts for: 1) Consumer
Surplus & 2) Producer Surplus. Define both and
discuss (in your own words) the economic implications of
both. These can be on the same graph.
A sales tax on sellers of a good leads to a loss of consumer
surplus, but a price ceiling or a price floor on that same product
will not. True or False?