Principles of Microeconomics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165905
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 12, Problem 2CQQ
To determine
The deadweight loss and tax revenue.
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Students have asked these similar questions
Suppose the world price of oil is $15 per barrel. At that price, the United States imports 400 million barrels daily and consumes 600 million barrels daily. The government then imposes a $5 per barrel tax on oil imports. For every dollar increase in oil prices, domestic consumption decreases by 20 million barrels per day, while domestic production increases by 40 million barrels per day.
3. What will be the cost of inefficient production, loss in consumer surplus, and deadweight loss? Use a diagram to help answer the question.
Carrie is willing to pay $1400 for the new Samsung Galaxy phone. Samsung is selling the new Galaxy phone for $1200. It costs Samsung $600 to produce this phone. The total economic surplus if Carrie purchases this phone is $________.
Carrie is willing to pay $1400 for the new Samsung Galaxy phone. Samsung is selling the new Galaxy phone for $1200. It costs Samsung $600 to produce this phone. The total economic surplus if Carrie purchases this phone is $________.
Im not sure which one is right one individual said
onsumer surplus = 1/2(willing to pay - selling price ) *quantity
CS = 1/2 ( 1400 - 1200) *1
CS = 100
Producer surplus = 1/2( selling price - willing to receive)*quantity
PS = 1/2 ( 1200-600)*1
PS =300
total economic surplus = PS +CS = 400
and another said
According to the given information, total economic surplus would be:
=12×Maximum willingness to pay-Minimum Willingness to accept×quantity sold=12×$1400-$600×1=$400=$800
Chapter 12 Solutions
Principles of Microeconomics, 7th Edition (MindTap Course List)
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