ScienceEconomicsChapter 6 example #75534
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Chapter 6 example #75534

Camilla Murphy avatar Camilla Murphy
16 February 2023
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12 test answers

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A demand curve reflects each of the following except the
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Ability of buyers to obtain the quantity they desire.
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Consumer surplus is
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The amount a buyer is willing to pay for a good minute the amount the buyer actually pays for it.
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On a graph, the area below a demand curve and above the price measures
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Consumer surplus.
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Bob purchases a book for $6, and his consumer surplus is $2. How much is bob willing to pay for the book?
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$8 (CS=WTP-P)
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Brock is willing to pay $400 for a new suit, but he is able to buy the suit for $250. His consumer surplus is
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$150.
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Economist typically measure efficiency using
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Total surplus.
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Total surplus
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Can be used to measure a markets efficiency. Is the sum of consumer and producer surplus. Is the value to buyers minus the cost to sellers.
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Efficiency in a market is achieved when
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The sum of producer surplus and consumer surplus is maximized.
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Cost is a measure of the
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Sellers willingness to sell.
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A supply curve can be used to measure producter surplus because it reflects
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Sellers costs.
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A seller is willing to sell a product only if the seller receives a price that is at least as great as the
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Sellers cost of production.
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Producer surplus is
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The amount a seller is paid minus the cost of production.