ECON 208 Lecture Notes - Lecture 13: Arc Elasticity, Excise, Demand Curve

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Eesha Sen Choudhury

Document Summary

Yes - total cost of the value of the job that you could have got (salary, working conditions, etc) Ex going to university - tuition (bc you could have put the money elsewhere) and loss of wages. Calculating cpi: equation wants to know the share of income you spend on each good. Calculating elasticity: point elasticity, arc elasticity, going to average - so you"re pretty much calculating elasticity at the point, will get same elasticity at either. Subsidy per unit sold: ex if you"re willing to sell something at but the government will give you so you sell it at . - > shifts the supply curve down. Lower price, changes demand curve --> new equilibrium quantity. Slope of ray (p/q) divided by slope of curve (1/b) Excise tax: when does it cause a shift in the supply or demand curve: any time. Unit elasticity: 10% increase in price, 10% fall in quantity --> te doesn"t change.