Micro Ch 7, 8

total surplus

all of the above

A simultaneous decrease in both demand for MP3 players and the supply of MP3 players would imply that

the value of MP3 players to the consumer has decreased, and the cost of producing MP3 players has increased

we can say that the allocation of resources is efficient if

total surplus is maximized

what happens to producer surplus when the price of a good rises?

Increase

what is the relationship between the demand curve and willingness to pay

at what price you're willing to pay

which of the following is correct?

efficiency deals with size of the economic pie, and equality deals with how fairly the pie is sliced

When a good is taxed, the burden of the tax

falls more heavily on the side of the market that is more inelastic

tax on a good pt. 2

gives sellers an incentive to produce less of the good than they otherwise would produce

a tax on a good

raises the price that buyers effectively pay and lowers the price that sellers effectively receive

American Revolution

remember 'British taxes imposed on the colonies'

Buyers of a product will bear the larger part of the tax burden, and sellers will bear a smaller part of the tax burden, when the

supply of the product is more elastic than the demand for the product

the governments benefit from a tax can be measured by

tax revenue

both the demand curve and the supply curve are straight lines. At equilibrium, producer surplus is

$24

what is the relationship between cost to sellers and the supply curve?

At what price you're willing to produce

what happens to consumer surplus if the price of a good falls?

It will increase

What is consumer surplus?

how much consumer will pay above market price.

what is producer surplus?

how much producers are willing to produce below market price.

the deadweight loss from a tax of $8 per unit will be smallest in a market with

inelastic demand and increase supply

the less freedom people are given to choose the date of their retirement, the

less elastic is the supply of labor

inefficiency exists in an economy when a good is

not being consumed by buyers who value it very highly

The benefit to sellers of participating in a market is measured by the

producer surplus

If the tax on a good is doubled, the deadweight loss of the tax

quadruples