{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chap014 - Chapter 14 Equilibrium and Efficiency Part V...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 14 - Equilibrium and Efficiency Part V: Markets Chapter 14: Equilibrium and Efficiency Main Concepts and Learning Objectives This chapter focuses on equilibrium and efficiency. The equilibrium discussion includes short-run and long-run equilibrium, and market adjustments to shocks such as shifts in demand or changes in cost conditions. The efficiency discussion explains the concepts of Pareto efficiency and economic efficiency, and the connection between aggregate surplus and efficiency. The chapter explains the computation of aggregate surplus, consumer surplus and producer surplus, and the impact of market processes on these measures. Skills needed for this chapter: Students will use algebra to find the market equilibrium and compute changes in the equilibrium in response to shifts in demand or supply. This information is presented in Section 3 of Chapter 2. Students who master the material presented in this chapter will be able to: Compute market supply and demand, and analyze the impact of changes in the number of firms on supply Compute the long run equilibrium P and Q Compute the new short run equilibrium P and Q that will result from a change in demand, and compute the impact on the long run number of firm Compute aggregate surplus, consumer surplus and producer surplus List criteria for economic efficiency Discuss conditions that create tradeoffs between efficiency and equity 14-1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 14 - Equilibrium and Efficiency Multiple Choice Quiz (10 questions) covering main points:  1. When the number of firms producing and selling product X increases, the market supply curve shifts a. shifts to the right. b. shifts to the left. c. does not shift because supply is the same as the marginal cost curve. d. none of the above 2. In order to produce good X efficiently, it is necessary to use a chemical process that was invented by Smith, Inc. Smith, Inc. holds the patent on this process. They can decide whether to sign a licensing agreement to permit a firm that produces good X to use the chemical process. Smith, Inc, is currently the only firm that produces good X. Does this market have free entry?
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the 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