Market Efficiency
You received $250 for a stationary bike and had a producer surplus of $50. You were willing to accept
$200
you received $250 for a stationary bike and had a producer surplus of $50. You were willing to accept
$200
allocative efficiency occurs when
MB=MC
a price floor is
a minimum legal price at which, a good, a service, or a resource can be sold
graphically, producer surplus is the area
above the supply curve and below the equilibrium price, from zero to the quantity traded
the difference between the maximum price consumers are willing and able to pay for a good or service and the price they actually pay is the
consumer surplus
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
the value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium is the
deadweight loss
graphically, consumer surplus is the area below the
demand curve and above the equilibrium price
graphically, consumer surplus is the area below the
demand curve and above the equilibrium price, from zero to the quantity traded
welfare
economics is a branch of economics that focuses on measuring the well-being of market participants and how changes in the market affect their well-being.
the production possibilities frontier (ppf)shows how much of two goods an economy can produce when it using all available resources as
efficiently
if an economy is producing on the production possibilities frontier, the economy is
getting as much output as possible from its resources
total surplus
is maximized when markets are in equilibrium
consumer surplus is 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
consumer surplus is the difference between the
maximum price consumers are willing and able to pay for a good or service and the price they actually pay
when there is productive efficiency
output is produced using the fewest resources possible to produce a good or a service output is produced at the lowest possible total cost per unit of production
a maximum legal price at which a good, a service, or a resource can be sold is a
price ceiling
what shows how mech of two goods an economy can produce when it is using all available resources as efficiently as possible?
production possibilites frontier
if an economy is producing on the production possibilities frontier, the economy is
productively efficient
a tax on suppliers shifts the
supply curve up vertically
the quantity traded times the tax equals
the tax revenue from a tax
the revenue collected from a tax equals
the tax times the quantity traded
deadweight loss is the
value of the economic surplus that is foregone when a market is not allowed to adjust to its competitive equilibrium
graphically, consumer surplus is the area below the demand curve and above the equilibrium price, from
zero to the quantity traded