ECON-UB 1 Study Guide - Deadweight Loss, Market Clearing, Economic Surplus

• School: New York University
• Department: Stern Economics
• Course: ECON-UB 1
• Professor: All

Document Summary

Econ-ub 1 pre-exam 2 notes: consumer surplus (in a competitive market) 1: total benefit or value that consumers receive beyond what they pay for the good, area above market clearing price and below demand curve. Q is where qd( p )=q s( p ) and p is where pd (q )=p s(q ) Q is where qd( p )=q s( p ) and p is where pd (q )=p s(q ) o o o o. Q is where qd( p )=q s( p ) and p is where pd (q )=p s(q ) o. 1(0)) q : welfare (in a competitive market, gains and losses to producers and consumers, deadweight loss: total loss in producer and consumer surplus. Economic efficiency is when consumer and producer surplus are maximized. Supply restrictions, e. g. limited taxi medallions, limited liquor licenses, etc: drivers are consumers, government is producer.