OVERVIEW: WEEK OF SEPTEMBER 16th

Topic

Economic-Surplus-supply-and-demand-graph.jpg

Welcome to week five of this semester! The weeks are flying by and you are only a week away from your first exam.

This week, you will be introduced to the concept of economic surplus.

You will be introduced to such terms as producer and consumer surplus and deadweight loss in an attempt to understand how markets are efficient when in equilibrium.

You'll see how consumer or producer surplus is transferred between each other when the government imposes taxes on either producers or consumers and consequently creates a loss of efficiency in markets.

Make sure to watch the course videos this week, they are very informative and clearly describe the results of a tax incidence on buyers and sellers. That said, you should be watching the course videos every week, they are perfect substitutes and complements to course lectures.

Objectives

By the end of this week you will be able to...

  • Differentiate between consumer and producer surplus.
  • Articulate the effects of taxes on consumer and producer surplus.
  • Determine price paid by consumers and received by sellers when an excise tax is imposed.
  • Calculate total revenues/sales generated, tax revenue and firm sales after tax.

Weekly Schedule

Due date Activity
Reading: Textbook Chapter 3, section 3.5
Refer to Schedule Assignment: Relevant Study Guide Questions
Sunday, 9/22 Quiz #4