Principles of Economics- Mankiw (5th) 135

Principles of Economics- Mankiw (5th) 135 - “right...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
IN THIS CHAPTER YOU WILL . . . See that the equilibrium of supply and demand maximizes total surplus in a market Examine the link between sellers’ costs of producing a good and the supply curve Examine the link between buyers’ willingness to pay for a good and the demand curve Learn how to define and measure consumer surplus Learn how to define and measure producer surplus When consumers go to grocery stores to buy their turkeys for Thanksgiving din- ner, they may be disappointed that the price of turkey is as high as it is. At the same time, when farmers bring to market the turkeys they have raised, they wish the price of turkey were even higher. These views are not surprising: Buyers al- ways want to pay less, and sellers always want to get paid more. But is there a
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: “right price” for turkey from the standpoint of society as a whole? In previous chapters we saw how, in market economies, the forces of supply and demand determine the prices of goods and services and the quantities sold. So far, however, we have described the way markets allocate scarce resources without directly addressing the question of whether these market allocations are desirable. In other words, our analysis has been positive (what is) rather than normative (what C O N S U M E R S , P R O D U C E R S , A N D T H E E F F I C I E N C Y O F M A R K E T S 141...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern