ECO 211 HA4

ECO 211 HA4 - and the price it actually receives. As the...

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Microeconomics 211 Chapter 4: Economic Efficiency, Government Price Setting, and Taxes HA 4 ( #1.3, 1.4, 2.5) 1.3) Consumer surplus is the difference between the highest price a consumer is willing to pay and the price the consumer actually pays. As the price of a good rises, consumer surplus decreases, and as the price of a good falls, consumer surplus increases. 1.4) Producer surplus is the difference between the lowest price a firm would be willing to accept
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Unformatted text preview: and the price it actually receives. As the price of a good rises, producer surplus increases, and as the price of a good falls, producer surplus decreases. 2.5) The statement is incorrect. Consumer surplus (and producer surplus) could increase by decreasing deadweight loss....
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This note was uploaded on 01/14/2012 for the course ECO 211 taught by Professor Morvey during the Fall '10 term at Piedmont TC.

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