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11 Cards in this Set
- Front
- Back
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Price ceiling |
Outlaw trade at prices above the ceiling ex. minimum wage; benefits consumers |
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If price ceiling is below equilibrium |
there is an implicit tax on producers and an implicit subsidy to consumers; this reduces tradable properties for the market |
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Price floor |
outlaw trade prices below the floor; ex. prohibition on buying and selling kidneys; it puts s limit on how low producer price can go; benefits producers |
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CS + PS is smaller when? |
gov't is introduced and tax is imposed, which destroys wealth |
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Capital cost is a what? |
Fixed cost |
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Variable costs |
Costs that change as output level changes like labor or ingrediants |
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What costs do not vary with the amount of output? |
Fixed costs |
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Payments ti your accountant to prepare your tax returns? FC or VC |
Variable Cost |
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Electricity to run the candy-making machines |
Fixed costs |
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Fees to design the packaging of your candy bar |
Fixed costs |
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Costs of material for packaging? |
Variable |
