ECON 1P91 Lecture Notes - Lecture 5: Qml, Savings Account, Opportunity Cost

• School: Brock University
• Department: Economics
• Course: ECON 1P91
• Professor: Marilyn Cottrell

Document Summary

Depends on elasticity of demand and supply. More inelastic the demand with an upward sloping supply, larger portion of tax paid by consumer. Division depends on elasticities of demand and supply. 10 cent tax is now levies on consumer: (buyer) Demand curve shifts leftward by vertical distance of the tax. Supply in perfectly inelastic(fixed qty crop harvested) Government buys surplus at support (floor) price. Supply shifts rightward by vertical distance of subsidy. Size of shifts depends on size of subsidy. Total product or output divided by the variable input (labor) Change in total product when labor is increased by one unit. 0 toa, output increasing at an increasing rate. The sleeper the slope of tp(q), the higher the level of mp(l) curve. Corresponds with pt,w where mpl is at a maximum. Ray from origin is tangent to total product curve(or q) 0 to i, output is increasing at an increasing rate. After i, output is increasing at a decreasing rate.