Elasticity/Inelasticity and consumer/producer surplus, assignment help
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines
Order Paper Now*Instructions: Please review the attachments before
proceeding to answering questions. Answer each question (except #4) with a
minimum of 100 word-count. Provide analysis and support your answers with a
minimum of 2 outside scholarly articles.
Must use the reference I attached as an additional source, here is the
reference for it: Sexton, R. (2013).
Exploring Economics (6th ed.). Mason: South-Western CENGAGE Learning. NO
PLAGIARISM please, I will check. Let me know if you have any questions or comments.
1. Review Slides 10-12 in your Attend section. Suppose a local coffee shop knows that its
elasticity of demand is 0.2. Would you
recommend that the coffee shop increase its price by 20%? Why or why not?
2. Review Slides 10-12 in your Attend section. Suppose a cigarette manufacturer knows that
its elasticity of demand is 1.3. Would
you recommend that they raise price by 20%?
Why or why not?
3. Would government be better off taxing gasoline or Nike
tennis shoes? Use the concept of
elasticity (or inelasticity) of demand to defend your choice.
4. Define the following:
a. Consumer surplus
b. Producer surplus
c. Total welfare
d. Deadweight loss
5. Refer to Slide 18 in the Attend section. Explain the effects of a tax on consumer and
producer surplus. Explain what happens
to total welfare when government levies a per-unit tax on a good. Use the concept of deadweight loss in your
explanation.
6. What are the two characteristics that must be met for a
good to be considered a “public good?”
Give an example of the “free rider” problem and explain why the good or
service is subject to this problem.
