Econ Exam Chapter 7
Total surplus is the sum of
consumer and producer surplus
If consumer surplus decreases, what happens to the price
increases
In a market, the marginal buyer is the person who
leaves first if the price were any higher
Total surplus can be used to measure a
market's effiency
A consumer's willingness to pay directly measures how
much a buyer values a good
Efficiency in a market is achieved when the sum of the
producer surplus and consumer surplus is maximized
Cost is a measure of the
sellers willingness to sell
Economists typically measure efficiency using
total surplus
Producer surplus directly measures the
well-being of sellers
On a graph, the area below a demand curve and above the price measures
consumer surplus
what is the amount the buyer is willing to pay minus how much they actually pay
consumer surplus
Supply curve can be used to measure producer surplus because it reflects
sellers cost