Chapter 4: Government Intervention Important Equations

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International Baccalaureate Economics (Important equations) Flashcards on Chapter 4: Government Intervention Important Equations , created by Jasmine Wells on 30/11/2015.
Jasmine Wells
Flashcards by Jasmine Wells, updated more than 1 year ago
Jasmine Wells
Created by Jasmine Wells over 8 years ago
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Resource summary

Question Answer
How to find new supply function when there is a tax? Pre: Qs= c+dP With tax: Qs=c +d(P-t) Where t= value of tax
How to find consumer surplus
How to find producer surplus
How to calculate welfare loss
Identifying tax burden of consumers and producers Note that consumers is everything above the P* Producers everything below P* - Multiply by Qt
How to find new supply function when there is a subsidy? Pre: Qs= c +dP Qs= c + d(P+s) Where s= subsidy value
Calculating shortage: Excess demand Shortage = Qd-Qs
Calculating surplus: Excess supply Surplus = Qs- Qd
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