CS and PS
The proper way to define Consumer Surplus
What is is the difference between what you are willing to pay and what you actually pay?
The term for the percentage of an individual's or corporation's income that is paid to the government as tax
What is Tax Rate
Define the term 'Marginal Product.'
The increase in output that arises from an additional unit of input.
What does MC stand for in economics, and what does it represent?
MC stands for Marginal Cost, representing the cost of producing one more unit of a good.
A business spends $50,000 on various expenses and earns total revenues of $70,000. Calculate the profit.
Profit = Total Revenue - Expenses = $70,000 - $50,000 = $20,000
The proper way to define Producer Surplus
What is is the difference between the price the seller received and how much they were willing to sell it for?
Give an example of an excise tax and on what types of goods is it commonly applied.
What is Alcohol, Cigarettes, or other consumptions that are a "sin"
A company spends $10,000 on fixed costs and produces 500 units with a total variable cost of $15,000. What is the total cost?
$25,000
Total cost for 200 units is $10,000, and for 201 units, it is $10,030. What is the marginal cost of the 201st unit?
$30
A company reports total revenues of $100,000. It spends $60,000 on operational costs. Additionally, the owner, who currently works full time in the business, forgoes a salary of $20,000 that could be earned elsewhere. Determine the overall profit.
Overall Profit = Total Revenue - Total Costs (including forgone salary) = $100,000 - ($60,000 + $20,000) = $20,000
Identify where the CS and PS is located on a Supply and Demand Graph
What is CS above and PS below the equilibrium?
Define 'Tax Incidence' in economics.
focusing on who ultimately pays the tax - consumers or producers.
What do you call the cost that does not vary with the level of output and remains constant, regardless of the quantity of goods or services produced?
Fixed Cost
If the variable cost for 150 units is $3,750, find the AVC for producing 200 units, assuming the cost increases by $15 per unit.
$28.75 per unit
An entrepreneur's business makes $120,000 in revenue, with operational expenses amounting to $80,000. The entrepreneur could alternatively earn a salary of $30,000. What is the profit from the business?
Profit = $120,000 - ($80,000 + $30,000) = $10,000
Define Deadweight loss.
What is the loss of total surplus due to inefficiency?
The government imposes a tax of $5 per unit on a product and the total number of units sold is 1000, calculate the total tax revenue
The total tax revenue is $5,000 (Tax Revenue = Tax per Unit * Quantity = $5 * 1000).
If fixed costs are $2,000, variable costs are $3,000, and total output is 150 units, what is the average total cost?
$33.33 per unit
A factory has fixed costs of $3,000 and produces 500 units with a total cost of $13,000. What is the ATC?
$26 per unit
A small bakery has annual revenues of $200,000. The costs for ingredients, utilities, and rent total $120,000. The owner, who also manages the bakery, could be employed elsewhere for an annual salary of $40,000. What is the bakery's profit?
Profit = $200,000 - ($120,000 + $40,000) = $40,000
In a certain market, the equilibrium price of a product is $30. The highest price that consumers are willing to pay for this product is $50. The quantity sold in the market is 100 units.
Calculate the consumer surplus
What is $1,000
When government imposes a tax on a good, how is the division of the tax burden between producers and consumers decided?
tax burden depends on the relative elasticity of supply and demand.
If the demand is more inelastic than the supply, consumers will bear a larger share of the tax burden.
If the supply is more inelastic than the demand, producers will bear a larger share.
A factory's variable costs increase linearly from $1,000 to $4,000 as output increases from 100 to 400 units. If fixed costs are $2,000, find the total cost for producing 300 units.
$4,500
A firm's total cost for producing 250 units is $7,500, including $2,500 in fixed costs. Calculate the ATC.
$30 per unit
A tech startup generates $500,000 in revenue. Its operational costs including salaries, rent, and utilities total $300,000. The founder, serving as CEO, foregoes an annual salary of $150,000 that could be earned in another company. Additionally, the startup uses an investment of $200,000, which could have otherwise earned a 5% annual return in a different investment. Calculate the startup's profit.
Profit = $500,000 - ($300,000 + $150,000 + ($200,000 * 5%)) = $500,000 - ($300,000 + $150,000 + $10,000) = $40,000