Economics 1021A/B Lecture Notes - Progressive Tax, Regressive Tax, Laffer Curve

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Charles Middleton

Document Summary

Maximize the welfare of society from the production/consumption of a good. Benefit comes from the consumption, not the production. Welfare or the consumer + welfare to the producer = welfare to society. Maximize the welfare of society from the consumption and production of a good/service. Benefit that consumers receive that they do not pay for. The area of the triangle above the price line and below the demand curve. Amount of revenue received that is greater than the minimum price required. Area below the price and above the supply curve. Consumer gains a new section of the graph, but at the cost of the front of the triangle. The triangle lost is called the deadweight loss to society . How we measure the benefit from a product. Additional benefit you receive from consuming 1 more unit. By how much you are willing to pay. Can also measure benefit by using the term utility. Additional cost of producing 1 more unit.