How much consumers gain from consuming goods

Assignment Help Microeconomics
Reference no: EM13767095

Consumer Surplus

"Consumer surplus" represents the difference between what a consumer is willing to pay for a good or service and the price that they actually pay. In other words, the concept of consumer surplus indicates how much consumers gain from consuming goods and services at a specified price.

Now let's consider the case of a "consumer deficit" or the loss represented by consumers who exist at the opposite end of the demand curve. These are those persons who cannot afford to consume any goods or services at the specified price.

To address such a consumer loss, imagine that you are now tasked with imposing a "surplus tax" on consumers through the addition of an individual sales tax which will be added to the market price of certain goods and services. The proceeds from such a tax will be used to compensate an equal number of those consumers at the bottom of the demand curve, thereby, giving them the opportunity to consume such goods and services which they otherwise would not have been able to purchase at the specified price.

What would be the various consequences of this tax on both consumption as well as production? 

In your response, provide examples and analysis to justify your conclusions. Quotations, paraphrases, and ideas you get from books, articles, or other sources of information should be cited using APA style.

Reference no: EM13767095

Questions Cloud

One hollow sphere with inner and outer radii : Suppose you have one hollow sphere with inner and outer radii 0.4m and 1.8m, and a second with inner and outer radii 1.4ft and 2.1ft. How many more cubic yards of material does the bigger hollow sphere have? Your answer should be in cubic yards. Form..
What are some problems you would expect to encounter : What are some problems you would expect to encounter if you were in charge of providing rehabilitation in a county jail
Quality of object-oriented language : The quality of a language that allows a programmer to express a computation clearly, correctly, concisely, and quickly is called.
The generic pharmaceuticals industry : Analyze the opportunites for Teva in innovative pharmaceutical and biosimilars.
How much consumers gain from consuming goods : The concept of consumer surplus indicates how much consumers gain from consuming goods and services at a specified price - difference between what a consumer is willing to pay for a good or service and the price that they actually pay.
Discuss any changes you would make to the policy : Research a current health policy of your choice and discuss why you find it relevant to you personally and the population. You may also discuss any changes you would make to the policy
Examples of illegal employment questions : List five examples of illegal employment questions. [Use credible sources]. For each example, why do you think these questions are or are not legal to ask prospective employees?
What is lawyering for a social change : What is lawyering for a social change, According to Ms. Loewy, opponents of lawyering for a social change have two main contentions in regard to this type of lawyering. Identify and explain these two contentions
Diferentiate losles and losy algorithms : Write briefly about he Computer System Components. Diferentiate losles and losy algorithms

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Through periods of inflation-all prices increase

Through periods of inflation, all prices increase. Inflation rates differ across regions mainly because of differences in housing prices.

  Marginal costs of abatement for the first source

Two pollution sources are located in the same town, immediately next to each other. For every quantity of abatement, marginal costs of abatement for the first source are higher than marginal costs of abatement for the second source.

  Write some of the other effects of inflation on the

in general if gdp increases this is usually an indicator of economic expansion and increased business activity. if gdp

  Product led to an associated decrease in mcgwires average

In 1998, Mark McGwire hit 70 home runs while playing for the St. Louis Cardinals. In 1999, McGwire hit 65 home runs. This decrease in marginal(home runs per season) product led to an associated decreas

  Write some of the toughest management challenges in

what are some of the toughest management challenges in developing it solutions to solve business problems and meet new

  Constructing a plant to manufacture a proposed new product

A company is considering constructing a plant to manufacture a proposed new product. The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required.

  Your task is to critically estimate implications of

assume you are a manager of a large multinational enterprise mne from an industry of your own choosing. you have been

  Draw demand and supply on a graph

Calculate the equilibrium price and quantity that will prevail in a free market and calculate the price elasticity of demand and the price elasticity of supply at the equilibrium.

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Compute the benefit-cost ratio

A project will cost $50,000. The benefits at the end of the first year are estimated to be $10,000, increasing at a 10% uniform rate in subsequent years. Using an 8-year analysis period at a 10% interest rate. Compute the benefit-cost ratio.

  Outline a plan that managers in the low-calorie

Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic.

  Soundscape enterprises manufactures sonoblast

Soundscape Enterprises manufactures Sonoblast, a device that produces a high-pitched reminder to telemarketers that they have once again disturbed you just when you were sitting down for dinner.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd