Quiz 1 Flashcards
Definition: Consumer Surplus
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Definition: Producer Surplus
a
Definition: TC
a
Definition: TB
a
Minimum wages and labor surpluses Algebra of supply and demand—how to find equilibrium P and Q
a
Cost/benefit analysis using CS and PS: min wage, milk price floor
a
Indian cloth price support
a
Taxes: How the tax burden is divided between buyer and seller graph and algebra example
a
New Zealand tariff example: why a big country can gain from a tariff, but a small country loses
a
trade deficits and harmless cash outflows
a
Taxes: Using algebra to find after-tax prices, quantities, and tax burdens, and changes of CS and PS
a
Subsidies: show DWL and government expense using supply and demand curves—graphically and algebraically
a
Exhaustible resources: Graph showing loss from forced conservation
a
Profit-maximization by competitive firms: MC=MR=P (graph, and math)
a
Fixed cost, variable costs
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Textbook explanation of why the shut-down price =minimum of AVC
a
Accountant example contradicting the textbook shut-down rule
a
Horizontal sum of firm supply curves to get industry supply
a
Why harmful externalities make the industry supply steeper than the simple horizontal sum
a
Economic profit vs accounting profit
a
Zero-profit theorem and the paradox of why the firms earn zero profit while the industry has positive producer surplus
a
Pareto and Kaldor improvements
a
Pareto efficiency: production, consumption, and trade
a
Criticisms of market efficiency: the rationality assumption and the micro/macroeconomics divide
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