Exam 3 review
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ProducerSurplus
Surplus 250
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Surplus 250 Less excess production 40
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Surplus 250 Less excess production 40Net Surplus 210
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Demand
Supply
Cost 70 x 3 = 210
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Demand
Supply
Cost 70 x 3 = 210Revenue 20 x 3 = 60
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Cost 70 x 3 = 210Revenue 20 x 3 = 60Loss 210 - 60 = 150
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Cost 70 x 3 = 210Revenue 20 x 3 = 60Loss 210 - 60 = 150
Producers Lose Money
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Cost 70 x 3 = 210Revenue 20 x 3 = 60Loss 210 - 60 = 150
Producers Lose MoneyNo surplus
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Cost 70 x 3 = 210Revenue 20 x 3 = 60Loss 210 - 60 = 150
Producers Lose MoneyNo surplusNegative surplus
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Government Minimum Price
Demand
SupplyConsumer
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GovernmentPrice
Minimum
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Minimum
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MinimumLoss
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MinimumLoss
Loss
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MinimumLoss
Loss
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MinimumLoss
Loss
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MinimumLoss
Loss
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Minimum Consumer LossProducer Gain Loss
Loss
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Loss
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Loss
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Loss
Loss
Government Maximum Price
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Maximum
Consumer GainProducer Loss
Loss
Loss
Government Maximum Price
0
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Demand
Supplywith no tax
BuyerSurplus
Tax Analysis
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Supplywith no tax
BuyerSurplus
SellerSurplus
Tax Analysis
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Demand
Supplywith no tax
Tax Analysis
Tax on Seller with shift Supply curve up by the amount of the tax
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Demand
Supplywith no tax
Tax Analysis
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax Analysis
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
40
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40
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
0
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0 1 2 3 4 5 6 7 8 9 10
Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
0
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
B
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
BC
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
BC
D
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
BC
D E
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
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D E
F
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
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D E
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Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
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D E
F
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
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D E
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Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Tax of 40 SAR
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Demand
Supplywith no tax
A
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D E
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Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Taxes Tax of 40 SAR
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Demand
Supplywith no tax
A
BC
D E
F
BuyersLose C to
deadweight lossand lose B to
taxes
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Taxes Tax of 40 SAR
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Demand
Supplywith no tax
A
BC
D E
F
BuyersLose C to
deadweight lossand lose B to
taxes
SellersLose E to
deadweight lossand lose D to
taxes
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
Taxes Tax of 40 SAR
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0 1 2 3 4 5 6 7 8 9 10
Demand
Supplywith no tax
A
BC
D E
F
BuyersLose C to
deadweight lossand lose B to
taxes
SellersLose E to
deadweight lossand lose D to
taxes
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
TaxesGovernmentgains B from buyers and D from sellers
Tax of 40 SAR
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0 1 2 3 4 5 6 7 8 9 10
Demand
Supplywith no tax
A
BC
D E
F
BuyersLose C to
deadweight lossand lose B to
taxes
SellersLose E to
deadweight lossand lose D to
taxes
Tax AnalysisSupply
with 40 SAR tax
Tax on Seller with shift Supply curve up by the amount of the tax
TaxesGovernmentgains B from buyers and D from sellers
Tax of 40 SAR
Buyers Sellers Taxes Total
Before A, B, C125
D, E F125 0 250
After A45
F45
B & D120 210
Change
Lose C20
Lose B60
Lose E20
Lose D60
Gain B60
Gain D60
40
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Demand
DomesticSupply
Export Analysis
DomesticPrice
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Demand
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Export Analysis
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Export Analysis
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Export Analysis
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Export Analysis
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New DemandDomestic & World
“kink”
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“kink”
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New DemandDomestic & World
“kink”
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Export Analysis
DomesticPrice
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New DemandDomestic & World
“kink”
0
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Export Analysis
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New DemandDomestic & World
“kink”
Total Sales
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Demand
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Export Analysis
DomesticPrice
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New DemandDomestic & World
“kink”
Total Sales
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Export Analysis
DomesticPrice
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New DemandDomestic & World
“kink”
Total Sales
0
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Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a higher pricelose B to Sellers
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a higher pricelose B to Sellers
Domestic Sellersgain D from
world marketand gain B from domestic buyers
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a higher pricelose B to Sellers
Domestic Sellersgain D from
world marketand gain B from domestic buyers
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a higher pricelose B to Sellers
Domestic Sellersgain D from
world marketand gain B from domestic buyers
Export Analysis
DomesticPrice
WorldPrice
New DemandDomestic & World
“kink”
Domestic Sales Total Sales
Exports7 - 3 = 4
Consumers LoseProducers Win
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a lower price
gain D from world sellers
and gain B from domestic sellers
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a lower price
gain D from world sellers
and gain B from domestic sellers
Domestic Sellerslose B to Buyers
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a lower price
gain D from world sellers
and gain B from domestic sellers
Domestic Sellerslose B to Buyers
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
A
B
C
D
Domestic Buyerspay a lower price
gain D from world sellers
and gain B from domestic sellers
Domestic Sellerslose B to Buyers
Import Analysis
DomesticPrice
WorldPrice
New SupplyDomestic & World
“kink”
Domestic Sales Total Sales
Imports7 - 3 = 4
Consumers WinProducers Lose
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BTariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC D Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC D E Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC D E F Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC D E F
G
Tariff of 10
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Demand
DomesticSupply
Tariff Analysis
PricewithTariff
WorldPrice
DomesticPrice
A
BC D E F
G
Tariff of 10
Consumers LoseProducers Win
Government WinsDeadweight Losses