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