Th1.2: Shifts of Demand and Supply Flashcards
1
Q
What will a decrease in demand do to producer and consumer surplus?
A
lead them to fall, as both price and output decreases
2
Q
What will an increase in demand do to producer and consumer surplus?
A
increase them
3
Q
What will a decrease in supply do to producer and consumer surplus?
A
lead them to fall
4
Q
What will an increase in demand do to producer and consumer surplus?
A
increase them
5
Q
What is community surplus?
A
consumer surplus + producer surplus
total welfare to society
6
Q
What does the use of tariffs do?
A
lead to a loss of consumer surplus
