Essential Graphs for Microeconomics

Essential Graphs for Microeconomics Basic Economic Concepts Production Possibilities Curve Good X A. B Concepts: Points on the curve-efficient W Points inside the curve-inefficient C Points outside the curve-unattainable with available resources Gains in technology or resources F D favoring one good both not other. E. Good Y. Nature & Functions of Product Markets Demand and Supply: Market clearing equilibrium P. S Variations: Shifts in demand and supply caused by changes in determinants Pe Changes in slope caused by changes in elasticity Effect of Quotas and Tariffs D. Qe Q. Floors and Ceilings P P. S S. Pe Pe D D. QD Qe QS Q QS Qe QD Q. Floor Ceiling Creates surplus Creates shortage Qd<Qs Qd>Qs Consumer and Producer Surplus P. S. Consumer surplus Pe Producer surplus D. Qe Q. Effect of Taxes A tax imposed on the BUYER-demand A tax imposed on the SELLER-supply curve moves left curve moves left elasticity determines whether buyer or elasticity determines whether buyer seller bears incidence of tax or seller bears incidence of tax shaded area is amount of tax shaded area is amount of tax connect the dots to find the triangle connect the dots to find the triangle of deadweight or efficiency loss.

2 D 1 Q Price sellers receive Price w/o tax surplus D S P Q e Q e Producer surplus A tax imposed on the BUYER-demand curve moves left elasticity determines whether buyer or seller bears incidence of tax shaded area is amount of tax connect the dots to find the triangle of deadweight or efficiency loss.

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  Microeconomics

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