Economics 1021A/B Lecture Notes - Lecture 5: Economic Surplus, Demand Curve, Marginal Utility

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ECON 1021A/B Full Course Notes

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The price is determined by the quantity. a. Demand curve is same as marginal benefit: marginal benefit is benifit receiving from producing one more unit of it, note : value ! When people buy something for less than it"s worth to them they have consumer surplus a. It can be found by area under the demand curve , above the price line and within the y- axis: when the price increases the consumer surplus decreases, total consumer surplus, a demand curve is marginal benefit. Because marginal benefit is the value paid for one more unit of it and demand is the willingness to pay for the good : relationship between price of the good and quantity demanded is called market. Inefficient production that creates deadweight loss that is borne by the entire society is social loss: sources of market failure, price and quantity regulations, taxes and subsidiaries, externalities, public goods and common resources, monopoly i.

Related Questions

1. Consumer surplus is not

a. the value of a good minus the price paid for it, summed over the quantity bought.

b. greater on the first unit sold than on the last unit sold.

c. greater on the last unit sold than on the first unit sold.

d. equal to the area below the demand curve and above the market price line.

2. The demand curve for hamburgers is the same as the

a. marginal benefit curve for hamburgers.

b. marginal cost curve of hamburgers.

c. consumer surplus curve of hamburgers.

d. All of the above.

3. A supply curve is

a. the same as a production possibilities frontier.

b. a marginal social benefit curve.

c. a marginal benefit curve.

d. a marginal cost curve.

e. a downward-sloping curve.

4. The opportunity cost of producing one more hot dog is $1.00. The price of a hot dog is $1.50. The producer surplus from selling one more hot dog is

a. $1.00

b. $1.50

c. $0.50

d. zero.

e. $2.50

5. Markets may not achieve an efficient allocation of resources when there are

a. external costs.

b. monopolies.

c. taxes.

d. all of the above.

When a competitive market achieves allocative efficiency, it implies that:

(i) the marginal benefit of having the product is greater than the marginal cost.

(ii) the buyers are getting the maximum consumer surplus from the product.

(iii) the combined consumer and producer surplus is maximized.

(iv) the quantity demanded is lower than the quantity supplied.

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B) difference between the market price and the maximum amount each individual is willing to pay for a good. C) sum of the prices that each individual is willing to pay for each quantity demanded. D) difference between the maximum amount each individual is willing to pay for a good and the market price. E) sum of the quantity demanded by each individual at each price. 1............... . 5) Market demand is the A) sum of the consumer surplus of each individual.

Economics 1021A/B Lecture Notes - Lecture 5: Economic Surplus, Demand Curve, Marginal Utility

ECON 1021A/B Full Course Notes

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