Consumer Surplus, Producer Surplus and the Efficiency

Consumer Surplus, Producer Surplus and the Efficiency -...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Consumer Surplus, Producer  Surplus and the Efficiency of  markets Lecture 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
Key Questions: What is consumer’s surplus? How is it  related to the demand curve? What is producer’s surplus? How is it  related to the Supply curve? Do markets produce a desirable allocation  of resources? Or could the market  outcome be improved upon?
Background image of page 2
Welfare Economics Allocation of resources refers to: How much of a good is being produced? Which producers produce it? Which consumers consume it? Welfare Economics  studies how the  allocation of resources affects economic  well-being We will first consider the well-being of  buyers
Background image of page 3

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

View Full DocumentRight Arrow Icon
PRODUCERS, AND THE  EFFICIENCY OF MARKETS 4 Willingness to Pay (WTP) A buyer’s  willingness to pay  for a good is the  maximum amount the buyer will pay for that good. WTP measures how much the buyer values the good. name
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/03/2011 for the course ECON 224 taught by Professor Ozturk during the Fall '09 term at South Carolina.

Page1 / 14

Consumer Surplus, Producer Surplus and the Efficiency -...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online