arianna econ chapter 7 and 8

arianna econ chapter 7 and 8 - econ chapter 7 willingness...

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econ chapter 7 willingness to pay: each buyers max prince, measures how buyer values the good Consumer surplus: the amount a buyer is willing to pay for a good - what they actually pay for it producer surplus: amount received by sellers - cost to sellers the sum of consumer and producer surplus, which we call  total surplus marginal buyer: person that leaves market first due to price The area below the demand curve and above the price measures  the consumer surplus in a market . consumer surplus is a good measure of economic wellbeing if  policymakers want to respect the preferences of buyers Producer Surplus: amount a seller is paid minus the cost of  production, benefit of pbeing the supplier Note that the area below the price and above the supply curve  equals the producer surplus If an allocation of resources maximizes total surplus, we say  that the allocation exhibits efficiency inefficient if it is being produced by the sellers not at the 
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arianna econ chapter 7 and 8 - econ chapter 7 willingness...

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