Consumers' surplus Essay Example | Topics and Well Written Essays - 1250 words

Consumers' surplus - Essay Example The first major insight that students obtain from the study of microeconomics is the theory of demand and supply. Nevertheless, the demand is the willingness and ability of individuals of consumers to acquire certain goods and services. Therefore, when prices increase (assuming determinants of demand constant) the quantity demanded decreases and vice versa, thereby resulting in a downward sloping demand curve due to negative price – quantity relationship. In contrast, the supply refers to willingness and ability of sellers to produce and sell certain goods and services. Hence, when prices increase (assuming determinants of supply constant) the quantity supplied also increases because of increase in profit margin of producers and vice versa. In simple words, the supply curve slopes upward due to positive price – quantity relationship. In this paper, I would elucidate on Consumer Surplus – a theory contributed by Alfred Marshall in 1920s (and derived by using the d ownward sloping demand curve) that initially received various serious criticism by then economists and academicians. Dooley (1983, p. 26) has summarized the following major criticisms raised at that time - â€Å"First, whether an additive utility function adequately explains consumer behavior; second, whether the marginal utility of money can be treated as a constant; third, whether the quantity demanded of one commodity can be treated as a function of its price alone; and fourth, whether it is possible make interpersonal comparisons†. The researcher will first explain what Consumer Surplus theory is after which an analysis will be presented on the credibility of this theory. The researcher will conclude this paper by providing a personal opinion and will finally provide 2 recommendations to the economists and pundits. 2. Analysis / Body Consumer Surplus is a concept studied in microeconomics and it refers to the estimation of consumer utility. In simple words, consumer surpl us is the surplus portion calculated by subtracting the maximum price consumer wants to pay for acquiring a good or service with the equilibrium market price. This could also be defined as the difference between the actual paid market price and the highest price at which demand of a product exists. As illustrated in Figure 1, the equilibrium quantity and price are P1 and Q1 respectively; however, the demand of a product also exists at higher prices. Therefore, the blue portion represents consumer surplus. Figure 1 In order to fully comprehend the theory of Consumer Surplus, I would like to present an example of demand of DVDs (video games) relative to their price. In this case, let us consider that a  consumer enters in a Computer shop to buy video games. The consumer buys 10 DVDs of $50 in total but he is inclined to pay $95 for one DVD so the consumer’s surplus for 1 unit will be $45, for 2 units will be $40, for 4 units will be $30, for 6 units will be $20, for 8 units w ill be $10 and for 9th unit will be $5 only. The figure 2 illustrates the consumer surplus in green, which is below the market demand curve and above the equilibrium market price. Figure 2 Samuelson & Nordhaus (2005, p. 96) highlights the following: â€Å"Consumer Surplus is the gap between the total utility of a good and its total market value†

The irony in An Indians Looking-Glass for the White Man Essay

The irony in An Indians Looking-Glass for the White Man - Essay Example   The paper tells that William Apess was a Native American who accepted the Christian faith. He continued to labor among the Native American Indians as a Christian minister and advocated human rights in his sermons and writings. The period in which he wrote marked an age of cruel slavery and anti-miscegenation laws which prohibited the intermarriage between Whites and Colored people. Apess uses the notable technique of irony in which he would expose the hypocrisy of the Whites employing their own religious doctrines and ideologies.  The superficiality of the White man's doctrine is a point of argument in Apess' work. Apess observes that one "may learn how deep (the White man's) principles are...I should say they were skin deep." The foundation of the White man's objection to the non-Whites enjoyment of their inalienable human rights is based on the skin tone. Skin pigmentation or exterior is not of value in any substantial and profound argument for what lies on the inside forms t he core and matters most. In his day, Apess would have been familiar with the Great Chain of Being philosophy which privileges the Whites at the head of the human races and relegates the Other to occupy lower tiers. Whites used this concept to justify their subhuman treatment of other races. The irony of using skin color as a means to exalt oneself and debase another reveals the truth of the proverb, 'All that glitters is not gold.' In time, the surface of any object is defaced and gradually stripped away. External appearances deceive however, only nature is real and enduring. Apess reiterates: "I am not talking about the skin, but about principles." Apess makes a stirring appeal to the tenets of Christianity, the so-called White man's religion. White men would use their religion to validate conquest, segregation, and the institution of slavery, however, Apess wields the Holy Bible, the book which instructs Christians in defence of human rights, equality, justice and brotherhood. The Christian Bible quotes that "God is no respecter of persons"-"Thou shalt love the Lord thy God with all thy heart, with all thy soul, with all thy mind, and with all thy strength-Thou shalt love thy neighbor as thyself." "By this shall all men know that they are my disciples, if ye have love one to another." "Let us not love in word but in deed." Repeatedly Apess preaches to the people who should be acquainted with their own doctrines of love. Apess concept of God differs from the White man's God. Judging from the professing Christians' cruelty, greed, and antagonism, the Apess shows that according to the white man's principles, the Christian God wou ld have to be an unfair and hateful deity who would favor a cross section of people and belittle others. True religion in Apess' eyes is an inclusive religion. One which inspires love and compassion. Apess laments that in 'Christian America' there remains active practice of cruelty, systematic oppression, inhumanity and hostility. Apess argues that a Christian should never be a slave-owner for doing so puts at detriment his own soul and contravenes the founding principles of his faith. He urges the equality and brotherhood of Negroes and Whites according to the Christian doctrines and wonders at White Christian hypocrisy. To add force to his arguments, he quotes numerous scriptural texts from the Bible from Matthew, John and Romans. To hate and propagate division is not only unchristian but also unethical. God's unconditional and impartial love is a perfect example of the love that man must have for his fellow. Greed, selfishness and prejudice are the true motivators of discriminati on that have poisoned the heart, turning it from human compassion. Vices such as sloth, greed and materialism are other adverse effects of the White