CH-7 PPT - Chapter7 Consumers, Producers, and the...

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Consumers, Producers, and the Efficiency of Markets M icroeconomics P R I N C I P L E S   O F P R I N C I P L E S   O F N. Gregory Mankiw N. Gregory Mankiw Chapter 7
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Welfare economics is the study of how the allocation of resources affects economic well- being. Welfare Economics
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Markets are usually a good way to organize economic activity.
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Outline of Chapter 7 New concepts Consumer surplus Producer surplus Efficiency Define carefully What is required for efficiency? Show that markets can lead to efficiency. Qualifications and caveats
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Outline of Chapter 7
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Willingness to pay is the maximum amount that a consumer will pay for a good. Willingness to Pay
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Price Quantity Willingness to Pay 5 10 20 $100 $75 $50
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Price Quantity Willingness to Pay = Demand 5 10 20 $100 $75 $50
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is a buyer’s willingness to pay minus the amount the buyer actually pays. Consumer Surplus
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This note was uploaded on 09/25/2011 for the course BMGT 220 taught by Professor Bulmash during the Spring '08 term at Maryland.

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CH-7 PPT - Chapter7 Consumers, Producers, and the...

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