101 lecture 6
TRANSCRIPT
![Page 1: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/1.jpg)
Microeconomics
Lecture 6
Supply, Demand, and Government Policies
Exam 2 Review
![Page 2: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/2.jpg)
![Page 3: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/3.jpg)
![Page 4: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/4.jpg)
price ceilingprice floortax incidence
Key Terms
![Page 5: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/5.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Supply
Demand
![Page 6: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/6.jpg)
1. What is the equilibrium price?
2. What is the equilibrium quantity?
3. If the market price was 80, how many pizzas would be sold?
4. If the market price was 30, how many pizza would be sold?
5. If the market price was 80, would there be a shortage, surplus, or equilibrium?
6. If the market price was 30, would there be a shortage, surplus, or equilibrium?
7. What would be the quantity demanded at a price of 80?
8. What would be the quantity supplied at a price of 80?
9. What would be the quantity demanded at a price of 30?
10. What would be the quantity supplied at a price of 30?
10 Questions
![Page 7: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/7.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 8: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/8.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 9: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/9.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 10: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/10.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 11: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/11.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 12: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/12.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 13: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/13.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD = QS
![Page 14: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/14.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD = QS
QS - QD5 - 5
![Page 15: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/15.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD = QS
QS - QD5 - 5
No ShortageNo Surplus
![Page 16: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/16.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 17: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/17.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 18: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/18.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 19: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/19.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 20: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/20.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 21: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/21.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD
![Page 22: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/22.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD
![Page 23: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/23.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD
![Page 24: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/24.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD
![Page 25: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/25.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD QS
![Page 26: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/26.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD QS
QS - QD8 - 2
![Page 27: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/27.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QD QS
Surplus of 6
QS - QD8 - 2
![Page 28: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/28.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 29: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/29.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 30: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/30.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 31: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/31.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 32: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/32.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 33: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/33.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
![Page 34: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/34.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QS
![Page 35: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/35.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QS
![Page 36: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/36.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QS
![Page 37: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/37.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QS
![Page 38: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/38.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QDQS
![Page 39: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/39.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QDQS
QS - QD3 - 7
![Page 40: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/40.jpg)
Price
Quantity
Supply
Demand
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
QDQS
Shortage of 4
QS - QD3 - 7
![Page 41: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/41.jpg)
1. What is the equilibrium price? 50
2. What is the equilibrium quantity? 5
3. If the market price was 80, how many pizzas would be sold? 2
4. If the market price was 30, how many pizza would be sold? 3
5. If the market price was 80, would there be a shortage, surplus, or equilibrium? surplus
6. If the market price was 30, would there be a shortage, surplus, or equilibrium? shortage
7. What would be the quantity demanded at a price of 80? 2
8. What would be the quantity supplied at a price of 80? 8
9. What would be the quantity demanded at a price of 30? 7
10. What would be the quantity supplied at a price of 30? 3
10 Questions
![Page 42: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/42.jpg)
Tax Liability
Tax Incidence
![Page 43: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/43.jpg)
Tax Liability
Tax Incidence
Who is legally responsible to pay the tax to the
government
![Page 44: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/44.jpg)
Tax Liability
Tax Incidence
Who is legally responsible to pay the tax to the
government
Who actually pays the tax
![Page 45: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/45.jpg)
Just because I have the Tax Liability does not mean that I have the
Tax Incidence
![Page 46: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/46.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Pizza Tax
Demand
Supply
![Page 47: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/47.jpg)
1. What is the equilibrium price before the tax?
2. What is the equilibrium quantity?
3. If the tax is 20 SAR, what will be the new price?
4. If the tax is 20 SAR, how many pizza would be sold?
5. What will be the total revenue with the new tax?
6. How much tax will the seller pay?
7. How much tax will the buyer pay?
8. How much will the total tax be?
9. How much did the seller earn after paying the tax?
10. Why isn’t the new price 70?
Pizza Tax Questions
![Page 48: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/48.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
![Page 49: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/49.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 50: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/50.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 51: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/51.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 52: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/52.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 53: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/53.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 54: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/54.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
![Page 55: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/55.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Tax on Supplier of 20Shift the curve up by 20
![Page 56: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/56.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Tax on Supplier of 20Shift the curve up by 20
![Page 57: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/57.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Tax on Supplier of 20Shift the curve up by 20
![Page 58: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/58.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Tax on Supplier of 20Shift the curve up by 20
![Page 59: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/59.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Tax on Supplier of 20Shift the curve up by 20
![Page 60: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/60.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 61: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/61.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 62: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/62.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 63: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/63.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 64: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/64.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 65: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/65.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 66: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/66.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 67: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/67.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 68: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/68.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 69: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/69.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 70: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/70.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Seller Price
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 71: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/71.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Seller Price
Taxesof 20
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 72: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/72.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Seller Price
Taxesof 20
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 73: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/73.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Seller Price
Taxesof 20
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 74: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/74.jpg)
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Price
Quantity
Demand
Pizza Tax
Buyer Price
Seller Price
Taxesof 20
Supplyno tax
Supplywith tax
Tax on Supplier of 20Shift the curve up by 20
![Page 75: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/75.jpg)
• Taxes discourage market activity • Value creation is reduced• Buyers and sellers share the burden• Buyers pay more, sellers receive less
Taxes
![Page 76: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/76.jpg)
Prepare for Exam 21. Read Chapters 4, 5, and 6
2. Review lecture slides on blog
3. Review lecture questions on blog
4. Review your class notes
5. Study alone for a while
6. Then study with smart friends
7. Don’t be late for exam
8. Bring pencil and calculator
![Page 77: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/77.jpg)
Chapter 4The Market Forces of Supply and Demand
marketcompetitive marketquantity demandedlaw of demanddemand scheduledemand curvenormal goodinferior goodsubstitutes complements
quantity supplied law of supplysupply schedulesupply curveequilibriumequilibrium priceequilibrium quantitysurplusshortagelaw of supply and demand
![Page 78: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/78.jpg)
Chapter 5Elasticity and Its Application
elasticityprice elasticity of demandtotal revenuetotal expenditureincome elasticity of demandcross-price elasticity of demandprice elasticity of supply
![Page 79: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/79.jpg)
ELASTICITY EQUATION BENCHMARK
Price Elasticity of Demand
Cross-PriceElasticity
IncomeElasticity
Price Elasticityof Supply
MidpointFormula
Inelastic | Elastic 1
Compliments | Substitutes 0
Inferior | Normal | Luxury 0 1
Inelastic | Elastic 1
%∆QD%∆P
%∆QS%∆P
%∆QD1
%∆P2
%∆QD%∆I
∆Q∆PQPx
![Page 80: 101 lecture 6](https://reader031.vdocuments.net/reader031/viewer/2022020314/5889ff321a28ab0f388b647f/html5/thumbnails/80.jpg)
Chapter 6Supply, Demand, and Government Policies
price ceilingprice floortax incidence