ECON 1113 LS 5 HW 5A and HW 5B
Measuring producer surplus tells us
how much better or worse off sellers are when the price changes.
A line showing the maximum willingness to pay for all buyers is the ____ curve.
demand
Total surplus
1) Is the sum of consumer and producer surplus. 2) Exists as a result of participation in market exchanges.
When the price is artificially low and some transactions no longer take place,
1) Producer surplus falls 2) Consumer surplus may rise or fall.
In a market with voluntary transactions, the results are like those in a zero-sum game.
False
We can ____ up each seller's producer surplus to describe the overall benefits that sellers received in a market.
add
Surplus is a way of measuring who ____ from transactions, and by how much.
benefits
Willingness to sell is the ____ price that a seller is willing to accept in exchange for a good or service.
minimum
In a(n) ____ market in which quantity is at or close to zero, total surplus is lower than it could be if a well-functioning market existed.
missing
When there are people who would like to make exchanges but cannot, for one reason or another, we say that a market is ____.
missing
The difference between the producer's willingness to sell and the actual price is the
net benefit that a producer receives from the sale of a good or service.
In market equilibrium,
total surplus is maximized.
Graphically, assuming an upward sloping supply curve, economic surplus is represented as the
triangular area between a supply or demand curve and the market price.
The supply curve is upward-sloping because producers are ____ to sell more at higher prices.
willing
When a perfectly competitive, well functioning market maximizes total surplus, the market is said to be ____.
efficient
Dead-weight loss is a loss of total surplus that occurs because the quantity traded is different from the market ____ quantity.
equilibrium
Markets can be missing for a variety of reasons:
1) Lack of technology that would make the exchanges possible. 2) Public policy prevents the market from existing. 3) Lack of accurate information or communication between potential buyers and sellers.
When the price is artificially high and some transactions no longer take place,
1) Part of the consumer and producer surplus is lost to both consumers and producers. 2) Part of the consumer surplus is transferred to producers.
Economists use the word surplus to describe which concepts?
1) Selling something for more than the minimum you would have accepted. 2) Buying something for less than you would have been willing to pay.
We can calculate dead-weight loss by
1) The area of the dead-weight loss triangle on a graph. 2) Surplus market equilibrium before intervention minus surplus market equilibrium after intervention.
Suppose a demand curve has a vertical intercept of (0,80). Suppose a supply curve has a vertical intercept of (0,0). The equilibrium price is $30 and the equilibrium quantity is 40. The total surplus is ____ dollars.
1600
Suppose a supply curve has a vertical intercept of (0,0); the equilibrium price is $40 and the equilibrium quantity is 100. The producer surplus is ____ dollars.
2000
Suppose a supply curve has a vertical intercept of (0,0); the equilibrium price is $30 and the equilibrium quantity is 40. The producer surplus, therefore, is ____ dollars.
600
To describe the overall benefits that buyers received in a market, we can add up each individual's ____ surplus.
consumer
Total ____ surplus is represented graphically by the area underneath the demand curve and above the equilibrium price.
consumer
Consumer surplus is the net benefit that a
consumer receives from purchasing a good or service.
In a zero-sum game, the
net value of a transaction is zero.
Seller's willingness to sell is determined by the ____ cost of the sale.
opportunity
Willingness to pay is the point at which the benefit that a person will get from the camera is equal to the ____ cost.
opportunity
The reservation price represents the buyer's maximum ____ to pay.
price
Measuring ____ surplus tells us how much better or worse off sellers are when the price changes.
producer
The relationship showing producers' willingness to sell is the ____ curve.
supply
Calculations of ____ can clearly show who benefits and who loses from policies such as taxes and minimum wages.
surplus
Using the concept of ____ is the best way to look at the benefits people receive from successful transactions.
surplus