Government Intervention- Micro Topic 2.8 

I think you’re wrong on 2

I am confused with number 3

Because the per unit tax seller receives is 6 that means their total revenue is 60 and isn't tax revenue higher than the revenue for firms? So total is 100 for tax

@@antisocialbarbie1587 As far as I understand, the tax revenue is calculated as 4*10=$40 or in other words tax*quantity of the new equilibrium.

@@antisocialbarbie1587 for the tax revenue you do $10-&6 = $4 which is the price and then multiply that with the quantity of 10, which gives you 40 and that is the tax revenue. The net price for sellers was, as you stated 6, so the answer is in fact E.

He’s a legend

@@lillyjames2934 The grade of IBDP seperate into 1 to 7, so it's possible to get a 4 in this system.

You take micro econ in high school? Wow my countries education system sucks

@@mahamm559 ? what do you mean

@@2036za I only took econ during my preparatory year in college, in high school we only took math and science nothing advanced

@@mahamm559 oof that sucks. I'm taking micro right now and I absolutely hate it haha. I have a terrible teacher and Mr. Cifford is really helping me.

@@2036za I am done with micro thank God, I got a B and I am not even sad about it my professor was sick and I am pretty sure had mental issues. I am taking macro now and I am slammed, I don't think I'll even get a B

opportunity cost

Awesome!

@@JacobAClifford Sir you have forgotten to include the answers for the 4 questions at the back of the video

@@Saida___ its the pinned comment lol

@@diaavalur8982 I cant fine the pinned comments xD

I have the same doubt

yup, thank you!

I often made mistakes, but i think Q2 is E, just not really sure.

@@tnt_grieferz9176 i still think it's B, let me explain my reasoning. The law is effectively a price ceiling. When there is price change, ceteris paribus, your demand curve and supply curve shouldn't shift (a shift is always caused by non-price factors!) But the quantity demanded increases and quantity supplied falls at the new lowered price (due to price ceiling). Since quantity demanded > quantity supplied, this is a shortage! I'll love to hear your reasoning for option E :D

can you plz explain the answer for Q3?

Hello @@aliibrahim9121 , this is how i thought: The new equilibrium is where the demand curve intersects supply+tax curve, where price of 1 unit is $10 and quantity produced is 10. At this quantity of 10 produced, the supply curve shows that it is $6 to produce each unit. This is hence the net price for sellers. The additional $4 remaining from the $10 is paid as tax per unit. Total tax revenue will be the tax per unit times the quantity which is $4×10 = $40

"Except the ones that were..."

"And MAYBE some others"

Bruh..

how did you get #3?

Same I got d

This is saving my life, thank you so much

the companies who receive subsidies can afford to lower their prices on the market which makes them more attractive to the consumer. So this company can invest in elsewhere to be more efficient. Subsidies can also be use to make local companies more attractive to the consummer compared to foreign companies who sell on the same market.

I don’t know if you still need that, but I’ll explain them. first question A price ceiling, it will be always under the equilibrium. price ceiling will make two new points on the demand and supply curves. These new points are the new quantity demanded, and quantity supplied, as we know if there is a price ceiling, we will get a shortage because the quantity demand is more than the quantity supplied so the quantity demanded will increase and the quantity supplied will decrease because the price have decreased. Thus, price (up) QD (up) QS (down) Second question if you prohibit the price to increase it’s like you put price ceiling . A Price ceiling means the maximum price to sell. You couldn’t sell above that price, and you will get a shortage as a result of doing that. The price ceiling (under equilibrium ) always will make a shortage in the market. Price floor (above equilibrium )will always make a surplus in the market. Third question the revenue of the government is the the tax price times the quantity supplied. ( we want to calculate what producers have sold at the new equilibrium) How do we know the net price? We will draw a line from the new equilibrium downwards to the X-axis (line of Q) and it will meet the old supply curve, at the point where they are met , go to the left side to see the price it will be six dollars. This is the net price . The tax price minus the net price is the amount of tax per unit, or you can calculate the total tax revenue (QS times tax price ) then divide the product by the QS . In the fourth question you can try to subtract the tax price from the net price to get the amount of tax per unit. Tax price= 10,45 and net price = 9,45 The net price is the difference between tax price, and net price. Thus, net price is one dollar. 🎉🎉🎉🎉🎉🎉 I hope u got that 🐳😁

@@ahmadsaleh2 thanks for this. I didn't quite understand what the "dollar amount of the unit tax" meant.

Look at my frist comment. The answers are there

*All

SO TRUE

idiot communist

@@Srifem shut up peasants, learn to work hard and earn skills

shut up peasants, learn to work hard and earn skills