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School
York University
Department
Economics
Course
ECON 1000
Professor
Ardeshir Noordeh
Semester
Fall

Description
Principles of MicroeconomicsNameECON 101Exam 2Student ID725061Consumer surplus isaequivalent to value of the good or service in its intended usebequivalent to value in exchange5cthe difference between total expenditure and what consumers have to pay per unitdthe difference between what consumers would be willing to pay and what they have to payetotal expenditure divided by price per unit2On a typical supply and demand diagram consumer surplus is the areaabetween the supply and demand curvesbbelow the supply curve and below price5cbelow the demand curve and above pricedbelow the entire demand curveeabove the entire demand curve3A competitive firm cannot affect it own output price becauseaprice is determined by consumers not producersbmarket demand is perfectly elastic5cit is only one firm among many so the price is determined in the market as a wholedconsumer preferences dictate a single price in a competitive markete of government regulations such as price floors and price ceilings4When the production function gets flatter as the quantity of labor increases Like in the highlighted portion of the graph to the right we know TPathat marginal product of labor is risingbthat marginal product of labor is falling5cnothing about marginal product of labordthat the marginal product of labor is zeroethat marginal product of labor goes to infinityLaborbg5Diminishing marginal returns occurs when the a marginal product of an input is risingbmarginal product of an input is zero5cmarginal product of an input is fallingdtotal product of an input is zeroetotal product of an input is negative
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