Market Efficiency

graphically, consumer surplus is the area below the demand curve and above the equilibrium price, from...to the quantity traded.

zero

graphically, producer surplus is the area above the supply curve and below the equilibrium price, from...to the quantity traded.

zero

all else held constant, at lower prices consumer surplus increases for two reasons:

- everyone who was already going to buy the product gets a break on the price, so they get more consumer surplus than before. - lower prices may now make it possible for more people to buy the product.

graphically, total...surplus is the entire area between the supply and demand curves, from a quantity of zero to the quantity traded.

economic

you received $250 for a stationary bike and had a producer surplus of $50. you were willing to accept $...

$200 producer surplus is the difference between the price at which a firm sells its good or service, and the minimum price it would have been willing to accept. $50 = $250 - $X

...surplus will always be less with a binding price floor than without.

consumer

the difference between the maximum price consumers are willing and able to pay for a good or a service and the price they actually pay is the...surplus.

consumer

the...is the area below the demand curve and above the equilibrium price, from zero to the quantity traded

consumer surplus

a minimum legal price at which a good, a service, or a resource can be sold is a price...

floor.

if an economy is producing on the production possibilities frontier, the economy is:

getting as much output as possible from its resources

a person will purchase a good or service so long as the person's willingness to pay is greater than the...

price

if production exceeds equilibrium quantity:

resources are being wasted

deadweight loss is the:

value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium

when calculating producer surplus for the market:

calculate the area above the supply curve and below the equilibrium price, from zero to the quantity traded.

if production exceeds the equilibrium quantity:

more output is being produced than the amounts that consumers want at the equilibrium price.

producing output at the lowest possible total cost per unit of production is:

productive efficiency

when a market is not allowed to adjust to the equilibrium price and quantity traded, some economic...will be lost.

surplus

when marginal benefit equals marginal cost, the market is allocatively efficient and is therefore maximizing economic...in that market.

surplus

gains from trade in the market are maximized when:

the equilibrium price is such that the quantity demanded equals the quantity supplied.

the quantity traded times the tax equals:

the tax revenue from a tax

...surplus is maximized when markets are in equilibrium.

total

...losses occur when too much or too little output gets produced.

deadweight

...welfare is not maximized if the amount of output produced is greater than the equilibrium quantity.

social

a tax on suppliers shifts the:

supply curve up vertically

graphically, producer surplus is the area above the...curve and below the equilibrium price, from...to the quantity traded.

supply, zero

the difference between the maximum price consumers are willing and able to pay for a good or a service and the price they actually pay is the consumer...

surplus

the difference between the price producers receive for a good or a service and the minimum price they are willing and able to accept is producer...

surplus

allocative...refers to producing the goods people want most

efficiency

with a binding price ceiling,...always lose.

producers

you paid $25 for a concert ticket and received a consumer surplus of $10. you were willing to pay $...

$35

if low prices are the result of government intervention:

- overall consumer surplus can increase or decrease - some consumers will be worse off because they cannot purchase or a service - some consumers will be better off because they can buy a good or a service at a lower price

if high prices are the result of government intervention:

- some producers will be better off because they can sell a good or a service at a higher price - some producers will be worse off because they cannot sell a good or service - overall producer surplus can increase or decrease

all else held constant, at higher prices producer surplus increases for two reasons:

- the higher price may now make it possible for more firms to sell the product - everyone who was already going to sell the product gets a higher price, so they get more producer surplus than before.

...efficiency means producing the level of output at which the marginal benefit of the last unit is equal to the marginal cost of that unit.

allocative

producing the goods and services that consumers most want in such a way that the marginal benefit equals the marginal cost is:

allocative efficiency

which of the following is true?

allocative efficiency means there is no deadweight loss.

when the marginal benefit of the last unit equals the marginal cost of the last unit, production is...efficient.

allocatively

in terms of the production possibilities curve, allocative efficiency means that at any point in time:

an ideal combination of production is based on consumer preferences.

when calculating consumer surplus for an entire market:

calculate the area below the demand curve and above the equilibrium price, from zero to quantity traded.

consumer surplus:

can increase or decrease as a result of a price ceiling

a maximum legal price at which a good, a service, or a resource can be sold is a price...

ceiling

producers may gain a little, but society as a whole will be worse off with a price floor because of the...losses.

deadweight

the difference between economic surplus when the market is at its competitive equilibrium and economic surplus when the market is not in equilibrium is the:

deadweight loss

the difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the:

deadweight loss

equilibrium in a market occurs where:

demand and supply intersect.

producer surplus is the:

difference between the price producers receive for a good or a service and the minimum price they are willing and able to accept.

producer surplus can increase or decrease as a result of a price floor, depending on how much the price is force to:

increase and how much the quantity supplied rises.

allocative and productive efficiency occur when the equilibrium...is such that the quantity demanded equals the quantity supplied.

price

when calculating...surplus for an individual firm, subtract the firm's willingness to accept from the market place.

producer

producing output at the lowest possible total cost of production per unit is...efficiency.

productive

deadweight loss is the:

value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium.

a branch of economics that focuses on measuring the welfare of market participants and how changes in the market change their well-being is known as:

welfare economics

a person will purchase a good or service so long as the person's:

willingness to pay (marginal benefit) is greater than the marginal cost.