New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

ECON 2020 Lecture 5-6 Week 3

by: Brianna Notetaker

ECON 2020 Lecture 5-6 Week 3 Econ 2020

Marketplace > Auburn University > Econ 2020 > ECON 2020 Lecture 5 6 Week 3
Brianna Notetaker

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These notes are over a few more aspects of Market Analysis and various principles of price control.
Principles of Economics: Microeconomics
William M. Finck
Class Notes
Econ, Economics, Microeconomic, Microeconomics
25 ?




Popular in Principles of Economics: Microeconomics

Popular in Department

This 8 page Class Notes was uploaded by Brianna Notetaker on Thursday September 1, 2016. The Class Notes belongs to Econ 2020 at Auburn University taught by William M. Finck in Fall 2016. Since its upload, it has received 11 views.


Reviews for ECON 2020 Lecture 5-6 Week 3


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 09/01/16
ECON 2020Exam 1 Lecture 5 8-29-16 Orange – DEFINITIONS Green – FORMULAS Market Analysis  Whathappenstothe marketfor SUVs when the price ofsteel (an input)falls? 1. Supplyincreases 2. Surplusatthe oldprice 3. Pe falls 4. Qe rises  Steel is aninputinSUVs. SUVs andgas are compliments.What happenstothemarket for gas when theprice ofsteel falls? 1. SupplyofSUVs increases 2. Price ofSUVs fall 3. Demandfor gas increases 4. Pe rises 5. Qe rises  Whathappenstothe marketfor gas when we expect higher future prices?(onlygraph where bothwill shift) 1. Demandincreases 2. Supplydecreases 3. Pe rises 4. Qe indeterminate(Idon’tknow) 2 Chapter6Price Controls Price Controls  Price control– legal restrictionsonprices TYPES 1. Price ceiling– a maximumlegal price 2. Price floor– minimumlegalprice Price ceiling  An effectiveprice ceilingis set belowthe equilibriumprice,butwhat is the effect? Consequencesof Price Ceilings 1. Shortages 2. Inefficientallocationamongconsumers 3. Wastedresources 4. Low quality Price Floor  An effectiveprice flooris set abovethe equilibriumprice,butwhat is the effect? 3 Consequencesof Price Floors 1. Surpluses 2. Efficientallocationamongproducers 3. Wastedresources 4. Protectionfrom imports 4 ECON 2020Exam 1 Lecture 6 8-31-16 Price ControlsNote  Price controlshaveno effect onthe market price iftheyare notset properly.  A price ceilingset abovePe, or a price floorset above,will notchange the behaviorofproducersandconsumers;themarket remainsin equilibrium.  Youcannotassumethatceilingmeansshortage or floormeans surplus. 1. Whateffect woulda price ceilingpf$27 haveon thismarket? a. Whenthe price goes down from $36 to $27, youend up with a shortage.Shortageof90 – 50 = 40 units 2. Whateffect woulda price floorof $27haveon thismarket? b.None, themarket remainsin equilibrium  Thehousemust beupside-downto beeffective! 5 Chapter5 Consumerand ProducerSurplus “Theword surplus in general means extra.” ConsumerSurplus  ConsumerSurplus= willingnesstopay– amountpaid  Willingnesstopay– Themaximumprice at which a consumerwill buy a good. Quantity 1 2 3 4 5 6 7 Willingness $7 $5 $4.50 $4 $3.50 $2.50 $2  Whatis consumersurplusifthe marketprice of thegood is $3.50?  Crossoff thenumbersthatwill notcontributetoyour calculations.(ex.#6and #7) TotalWillingness=$7 + $5 + $4.50 + $4 + $3.50 = $24 TotalPaid= $3.50 x $5 = $17.50 ConsumerSurplus= $24 – $17.50 - $6.50 6 ConsumerSurplus  On a graph,consumersurplusisthe area abovethe price butbelow the demandcurve.  Price andconsumersurplusmoveopposite. Producer Surplus  Producer surplus= amountreceived– willingnesstoaccept  Willingnesstoaccept – The minimumprice atwhich a producerwill sella good Quantity 1 2 3 4 5 6 7 Willingness $.50 $1 $1.50 $2.50 $3.50 $4 $5  Whatis producersurplusifthemarket price ofthe good is$3.50?  Crossoff thenumbersnotincludedincalculations(Ex.#6 and#7) Totalreceived = $3.50 x $5 = $17.50 TotalWilling= $.50 + $1 + $1.50 + $2.50 +$3.50 = $9 Producer Surplus= $17.50 - $9 = $8.50 7 Producer Surplus  On graph,producersurplusisthe area belowtheprice but abovethe supplycurve.  Price andproducersurplusmovetogether. 8


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.