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Unformatted text preview: generally increases. e. Consumer surplus: the amount above the price paid that a consumer would willingly spend, if necessary, to acquire the units purchased f. Producer surplus: the amount producers receive upon selling the units above the costs of producing the units g. Deadweaight loss: the cost to society of not operating efficiently h. Efficiency: the absence of waste. Efficiency is obtained where the MC of production equals the MV of consumption (i.e. at the market-clearing price and quantity) i. Welfare: commonly, the sum of consumer and producer surplus. Defined this way, welfare is maximized in the perfectly competitive markets. j. they have a higher gdp in California 2. Societys production choice 3. Marginal cost and supply 4....
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This note was uploaded on 04/05/2008 for the course ECON 201 taught by Professor Wadell during the Winter '08 term at University of Oregon.
- Winter '08
- Absolute Advantage