Questions p.150 Think it over 1. Why do many governments impose duties on imported goods? 2. What are the effects of the imposition of duties on the price of imported goods‚ the volume of imports‚ the consumer surplus of domestic consumers and the producer surplus of domestic producers? 3. Why does the Hong Kong Government impose duties on very few types of imports? p.151 Discuss 12.1 Explain how the imposition of tariffs and quotas may restrict international trade and protect domestic
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Details | Page number | 1.0 Article Summary | 3 | 2.0 Introduction | 3 | 3.0 Analysis | | 3.1 Demand and Supply | 4-6 | 3.2 Substitute | 6 | 3.3 Shortage | 7 | 3.4 Elasticity | 8-9 | 3.5 Price ceiling | 10 | 3.6 Consumer and producer surplus | 11-13 | 3.7 Tax | 13-14 | 4.0 Conclusion | 15 | References | 16-17 | | | 1.0 Article Summary The article “Consumers complain cooking oil sold at higher than fixed price” which was published on November 27‚ 2012 talks about
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increases when A. producer surplus increases B. producer surplus decreases C. consumer surplus increases D. consumer surplus decreases Bottom of Form Correct : Producer surplus is the difference between the minimum price the producer is willing to receive and what they actually receive. The surplus is their profit‚ and the larger the surplus‚ the greater their profit on the good. When it decreases‚ the producer receives a price closer to the minimum acceptable. The consumer surplus measures what
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Chapter 7: Consumers‚ Producers‚ and the Efficiency of Markets 1. Consumer Surplus a. Willingness to Pay i. A buyer’s maximum price they are willing to pay ii. measures how much that buyer values the good iii. Consumer Surplus: the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. 1. consumer surplus measure the benefit buyers receive from participating in a market b. Using The Demand Curve To Measure Consumer Surplus i. Consumer Surplus is closely related
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This is when the market is at equilibrium‚ where consumers and producers are not yet worse off. Consumers are paying at a reasonable price while producers are receiving a good amount of money. The diagram shows that consumer surplus is at area A+B+E while producer surplus is at area C+F+G. Consumer surplus refers to the willingness of a buyer to pay for a good minus the price that the buyers expects to pay for it while producer surplus is the value that the sellers receive for a good minus the cost
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Consumer and Producer Surplus ARSC 1432 Microeconomics Co-Seminar SPRING 2009 Consumer Surplus = CS = the difference between what consumers are willing to pay and what they actually pay for a good or service. Producer Surplus = PS = the difference between what producers are willing to accept for their produce and what they actually receive for a good or service. Social Surplus = SS = CS + PS [pic] To calculate CS or PS‚ use the formula for area of a triangle: (½)(base)(height)
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equal to the quantity demanded. Supply and demand are balanced. The price at which the quantity supplied and demanded are equal is called the equilibrium price. At this price‚ the amount purchased is exactly equal to the amount sold. There is no surplus product available on the market‚ nor are there shortages of supply at that price. For this reason‚ the equilibrium price is also called the market-clearing price. Everything put on the market‚ at that price‚ is sold. Returning to the bags of potato
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per pound of cheese. (In real life‚ the actual price floor was officially set at $16.10 per hundredweight of cheese. One hundredweight is 100 pounds.) At that price‚ according to data from the USDA‚ the quantity of cheese produced in 2009 by U.S. producers was 212.5 billion pounds‚ and the quantity demanded was 211 billion pounds. To support the price of cheese at the price floor‚ the USDA had to buy up 1.5 billion pounds of cheese. The accompanying diagram shows supply and demand curves illustrating
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to Qd. So imports = Qd-Qs. A is the gain to the producers‚ A+B+C are the loss to the consumers. B+C is the deadweight loss (supply and demand are not at the equilibrium). Now suppose the government eliminates imports by setting a quota of 0. What are the gains and the losses from such a policy ? With no imports the domestic price will rise to P0. Consumers who still purchase the good in quantity Q0 will pay more and will lose an amount of surplus given by A+B. Due to the higher price some consumers
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11/14/2012 CHAPTER EIGHT PROBLEM SET 1. Use the graph below for the following: a. Shade in the area that represents consumer surplus and label it area A. b. Shade in the area that represents producer surplus and label it area B. c. What is the numerical value for consumer surplus? d. What is the numerical value for producer surplus? 2. Determine what percentage of a tax would be borne by consumers in each of the following situations: a. Price
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