Supply and Demand With A Tax

Supply & demand with a tax. Check out the other videos for more economics lessons. For the AP Microeconomics Study Guide email me at: mjindrick@hotmail.com

The economics book associated with these videos is now on Amazon here: http://www.amazon.com/AP-Economics-Microeconomics-School-Students/dp/14635804...

Study Questions:
1) Show supply & demand with an equilibrium price and quantity labeled as Pe & Eq. Then, show the consumer and producer surplus.

2) In your own words, describe producer surplus, consumer surplus, and deadweight loss.

3) If demand goes up what happenes to the amount of consumer surplus and producer surplus. Show this graphically.

4) When supply & demand is both equally elastic, who pays for the government's tax?

5) If demand was completely inelastic who would pay for the tax? Explain.

6) On your paper show what happens when there is a $4 per unit tax. How much do the consumers have to pay now? Show the area of this tax on your graph by shading it in. Where is the consumer surplus, producer surplus, and deadweight loss?

7) How can the area of tax revenue be calculated?

Category:

Education

Tags:

• Supply and Demand
• Tax
• Per Unit Tax
• Jindrick
• Economics
• AP Economics
• Microeconomics
• AP Microeconomics
• AP Economics Study Guide

[talmadhoun]

Thank you

[AdvancedEcon]

@talmadhoun No problem. Glad it was of use. Check out my other videos if you need help with any economic ideas.

[aeroboy540]

the video is good except that the supply curve shouldn't have shifted inward initially. a per unit excise tax doesn't imply an inward shift of the supply curve.

[jan12561]

oh so THAT is what it is! i read a whole chapter on this topic and could not understand it at all! thank you for explaining it so clearly in 2 1/2 minutes.

[ELIASGTR]

Nice video!