M consumer surplus the value consumers get from a

m. Consumer surplus: the value consumers get from a good but do not have to pay for.
n. Market supply curve: a curve indicating the total quantity of a good that all producers in a competitive
market would produce at each price, holding input prices, technology, and other variables affecting
supply constant.
o. Change in quantity supplied: changes in the price of a good lead to a change in the quantity supplied of
that good. This corresponds to a movement along a give supply curve.
p. Change in supply, changes in variables other than the price of a good, such as input prices or
technological advances, lead to a change in supply. This corresponds to a shift of the entire supply curve.
q. Supply shifters: variables that affect the position of the supply curve are called supply shifters
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r. Excise tax is a tax on each unit of output sold, where the tax revenue is collected from the supplier.
s. An ad valorem tax is a percentage tax.
t. Supply function: a function that describes how much of a good will be produced at alternative prices of
that good, alternative input prices, and alternative values of other variables affecting supply.
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u. Producer surplus: the amount producers receive in excess of the amount necessary to induce them to
produce the good.
v. Price ceiling: the maximum legal price that can be charged in a market.
w. Full economic price: the dollar amount paid to a firm under a price ceiling, plus the nonpecuniary price.
x. Price floor: the minimum legal price that can be charged in a market.
y. An excise tax is a tax on each unit of output sold, where the tax revenue is collected from the supplier.
z. An ad valorem tax literally means “according to the value”. It is a percentage tax.
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aa. Comparative static analysis: the study of the movement from one equilibrium to another.
bb. The full economic price is the price such that quantity demanded equals the available units.
2. Key points
a. Producer expectations about future prices also affect the position of the supply curve.
b.
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3. Formulas
a. Demand function
b. Supply function
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Chapter three
1. Definitions