7 Econ notes - Missed class up to Producer Surplus get from book 1 Welfare economics 2 Consumer Surplus III Producer Surplus A Cost and willingness

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Missed class, up to Producer Surplus, get from book 1. Welfare economics 2. Consumer Surplus
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III. Producer Surplus A. Cost and willingness to sell i. Cost: The value of everything a seller must give up to produce a good ii. Example: Hire someone to paint your house and accept bids from the following workers iii. Seller Cost 1. Mary $900 2. Frida $800 3. Georgia $600 4. Grandma $500 iv. The winning bid will be slightly below $600 v. Producer Surplus 1. The amount a seller is paid minus the cost of producing the good 2. Grandmas surplus is 599-500 3. Grandmas surplus is $99 vi. What if two houses need to be painted? vii. The price would be higher; it would be 799 a piece. That is the price that makes sure that Georgia paints the house. We have to pay them the same B. Willingness to sell (or cost) reflects onto the supply curve i. Price Q Supplied ii. 900+ 4 iii. 800-899 3 iv. 600-799 2 v. 500-599 1 vi. Less than 500 0 vii. If price is 800---Producer surplus is 500 1. Grandmas surplus is 300
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This note was uploaded on 04/08/2008 for the course ECONOMICS 211 taught by Professor Petitfrere during the Fall '08 term at University of Miami.

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7 Econ notes - Missed class up to Producer Surplus get from book 1 Welfare economics 2 Consumer Surplus III Producer Surplus A Cost and willingness

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