Exam 2 Ch 4 & 5 Flashcards
(7 cards)
1
Q
Consumer Surplus
A
the price that consumers pay for a product or service is less than the price they’re willing to pay
2
Q
Total Surplus
A
Consumer Surplus + Producer Surplus
3
Q
Deadweight Loss
A
The reduction in economic surplus resulting from a market not being in competitive equilibrium
4
Q
Price Floors
A
A legally determined MINIMUM price that sellers may receive
5
Q
Price Ceilings
A
A legally determined MAXIMUM price that sellers can charge
6
Q
Market Failure
A
Market fails to produce efficient level of output
7
Q
Marginal Private Cost and Benefit
A
Benefit= Benefit received by the consumer from
consuming extra unit of a good or service
Cost= Cost born by the producer from producing an extra unit of a good or service
