ECON 705 LSUS EXAM 3 2026 STUDY GUIDE COMPLETE GRADUATE ECONOMICS CONCEPTS AND PRACTICE QUESTION

ECON 705 LSUS EXAM 3 2026 STUDY GUIDE
COMPLETE GRADUATE ECONOMICS
CONCEPTS AND PRACTICE QUESTIONS

◉ Consumer Surplus (CS). Answer: Benefit - Opportunity Cost (to
buyers)
Reservation Price - Actual Market Price


◉ Producer Surplus (PS). Answer: Benefit - Cost to Sellers
Actual Price - Reservation Price


◉ Rational: CS. Answer: Buy if greater than or equal to 0


◉ Rational: PS. Answer: Sell if greater than or equal to 0


◉ Government Revenue. Answer: Amount of Tax per Unit x Units
Sold (Q)
T (tax per unit) x Q (amount of units)


◉ Amount of Tax. Answer: Price (buyer) - Price (seller)


◉ Deadweight Loss. Answer: Lost Economic Surplus (ES) due to tax.

, More loss the more price elastic buyers and sellers are.


◉ Inelastic. Answer: Side of the market relatively more ___________
will bear the larger burden of tax.


◉ % of Tax Borne by Seller. Answer: (Ed/Ed+Es) x 100


◉ % of Tax Borne by Buyer. Answer: (Es/Ed+Es) x 100


◉ Profit. Answer: Benefit (TR) - Cost to Seller (PS)


◉ Total Revenue (TR). Answer: Price x Q = Benefit
Variable Cost (VC)


◉ Marginal Revenue (MR). Answer: Change in Total Revenue (TR) /
Change in Q
Change in Variable Cost (VC) / Change in Q


◉ Explicit. Answer: Accounting Costs


◉ Implicit. Answer: What you give up to do a job.