ECON 2030 : Econ Exam 2
Document Summary
Practice problems: chapter 7: 1-3, 6-12, 14, 18. Consumer surplus: the difference between what consumers would have been willing to pay and what they actually pay. Producer surplus: price the producer sells the product for less the cost of producing it. Deadweight loss: the loss of consumer and producer surplus from a tax. Profit: what"s left over from total revenues after all the appropriate costs have been subtracted. Total revenue (tr): the amount a firm receives for selling its product or service plus any increase in the value of the assets owned by the firm. (tr= p. Marginal revenue (mr): the change in total revenue from selling one more unit. Total cost (tc): the explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm. Marginal cost: additional cost over and above the costs already incurred. Normal profit: the amount the owners would have received in the next best alternative.
