ECON 1050 Chapter Notes - Chapter 6: Social Cost, Lux, Kilogram
Document Summary
Econ 1050 chapter 6 notes: price ceiling or price cap: a price higher than a specified price/level. An illegal market in which the equilibrium price exceeds the price. A government regulation that makes it illegal to charge a price lower: unlike a price ceiling, when the price floor is set below the equilibrium price has, price floor: than a specified price/level no effect on the market. Tax on seller: buyer pays of the tax and the seller pays the other , new supply curve will always be current supply plus tax. Tax and elasticity of demand: buyers pay all tax when there is perfectly inelastic demand, sellers pay all tax when there is perfectly elastic demand. Taxes and efficiency: taxes cause supplier/seller and buyer surplus" to shrink and create a deadweight loss, the lost surplus go to the government as tax revenue. Taxes and fairness: benefits principle: benefits they receive from the services provided by the government.