chp9 - ECON 300B Lei Intermediate Microeconomics Winter...

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Unformatted text preview: ECON 300B Lei Intermediate Microeconomics Winter 2011 1 Chapter 9 Chapter 9 Chapter 9 Chapter 9 Applying the Competitive Model Applying the Competitive Model Applying the Competitive Model Applying the Competitive Model Consumer surplus (CS) Consumer surplus (CS) Consumer surplus (CS) Consumer surplus (CS) ~ the dollar difference between what the consumers are willing to pay willing to pay willing to pay willing to pay for a quantity of a good and how much consumers actually pay actually pay actually pay actually pay for that quantity Graphically, it is the area below the demand curve (consumers willingness to pay) minus the area below the market price (amount consumers actually pay) up to the quantity traded : i. If g G is traded at G , the area that represents CS is ____________________________ ii. If g is traded at G , the area that represents CS is ____________________________ iii. If g is traded at G , the area that represents CS is ___________________________ Producer surplus (PS) Producer surplus (PS) Producer surplus (PS) Producer surplus (PS) ~ the dollar difference between how much producers are actually paid are actually paid are actually paid are actually paid for a quantity of a good and what producers are willing to be paid willing to be paid willing to be paid willing to be paid for that quantity Graphically, it is area below the market price (amount producers actually receives) minus the area below the supply curve (producers willingness to sell) up to the quantity traded : i. If g G is traded at G , the area that represents PS is ____________________________ ii. If g is traded at G , the area that represents PS is ____________________________ iii. If g is traded at G , the area that represents PS is ___________________________ g G g g G g g G g g G g ECON 300B Intermediate Microeconomi Welfare (W) Welfare (W) Welfare (W) Welfare (W) ~ the well-being of consum Welfare economics Welfare economics Welfare economics Welfare economics ~ the study of how a chang Without government inter Deadweight loss (DWL) Deadweight loss (DWL) Deadweight loss (DWL) Deadweight loss (DWL) ~ loss of welfare that cann i.e., Perfect competition and welf Perfect competition and welf Perfect competition and welf Perfect competition and welf Welfare is maximized (the Under perfect competition producers. If any other qu are willing to pay), there w i. underproduction (i....
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chp9 - ECON 300B Lei Intermediate Microeconomics Winter...

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