ECON Exam 1

all else held constant at a lower price consumer surplus increases for two reasons

1) lower prices may now make it possible for more people to buy the product 2) everyone who was already going to buy the product gets a break on price so they get more consumer surplus than before

When a non-price determine if the supply changes...

1) market adjust to new equilibrium prices and quantitie 2) an entire new supply relationship is created 3) The supply curve shifts to the left or right

when there is productive efficiency

1) output is produced at the lowest possible total cost per unit of production 2)output is produced using the fewest resources possible to produce a good or service

When the price of a good service or resources increase

A quantity supply increases

Ask him legal price at which a good service or resource can be sold is called a price......

Ceiling

Nonprice determinants are held ______ for any given demand curve

Constant

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

Consumer surplus

The market clearing price is the same at the ________ price

Equilibrium

The quantity trade when the quantity is pie have a good service or resource equals the quantity demand it is called the _______ Quantity

Equilibrium

When a sordid is illuminated the market returns to A ______ where the quantity supplied equals the quantities demanded

Equilibrium

When the quantity supplied of a good service or resource because the quantity demand this quantity trade is known as the.....

Equilibrium quantity

If the quantity supplied equals the quantity demanded....

Equilibrium will stay the same if all else is equal

Shortage is sometimes called

Excess demand

A price fixed above equilibrium that changes the incentives that both buyers and sellers fees is called price....

Floor

Incentive face by both buyers and sellers changes in the face of a price....

Floor

The lowest wage that a firm can legally play employees in the labor market is the _______ wage

Minimum

A characteristic of demand for a good service or resource other than its own market price is....

Nonprice determinant of demand

The primary determinant of the quantity demanded by a consumer is the

Price of a good or service

When a normal good price changes, the

Quantity demand falls as the price rises

A price ceiling is

The maximum legal price I would your good service or resource can be sold

A surplus occurs when

The quantity of output supplied is greater than the quantity of output demanded at the current market price

In the price of a good service or resource decreases

The quantity supplied decreased

_______ 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

Welfare

If price was the not allowed to adjust, a shortage

Would persist and the market would not return the 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

the difference between the price producers receive for a good or service and the min price they are will and able to accept is

producer surplus

if you are willing to see your used bike for $400 but someone paid you $500 for it you receive

producer surplus of $100

Deadweight loss is the

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