Consumers, Producers, and the Efficiency of Markets

What is the primary subject of study in welfare economics?

What does a buyer's willingness to pay for a good measure?

If John's willingness to pay for an Elvis Presley album is $100 and he buys it at an auction for $80, what is his consumer surplus?

In a supply-and-demand graph, how is consumer surplus measured?

According to the analysis in Chapter 7, how does a lower price for a good affect consumer surplus?

In the context of producer surplus, what does the term 'cost' refer to?

Using the house-painting example from Table 2, if Grandma's cost is $500 and she gets paid $600 for the job, what is her producer surplus?

How is producer surplus represented on a supply-and-demand graph?

What is the primary goal of the 'benevolent social planner' introduced in Chapter 7?

How is total surplus in a market calculated?

What does it mean for a resource allocation to exhibit 'efficiency'?

In the Elvis Presley album auction example with four buyers (John WTP $100, Paul WTP $80, George WTP $70, Ringo WTP $50), if the market price is exactly $80, what is the total consumer surplus?

In the house painting example, with costs for Mary ($900), Frida ($800), Georgia ($600), and Grandma ($500), if two houses need painting and the price settles at $800 per house, what is the total producer surplus?

At any given quantity, the price on a demand curve shows the willingness to pay of which buyer?

At any given quantity, what does the price given by the supply curve show?

When a price of a good falls, the increase in consumer surplus is composed of two parts. What are they?

When a price of a good rises, the increase in producer surplus is composed of what two parts?

Under which circumstance would consumer surplus NOT be a good measure of economic well-being, according to the chapter?

What is the primary argument economists might make IN FAVOR of a free market for human organs, as discussed in the case study?

What is the main argument concerning fairness that critics of a free market for organs raise?

Which of the following is NOT one of the three insights about market outcomes that Chapter 7 concludes leads to an efficient allocation of resources?

The conclusion of Chapter 7 mentions two primary reasons why a market may fail to be efficient. What are these two types of market failure?

Melissa buys an iPod for $120 and receives a consumer surplus of $80. What is her willingness to pay?

Bert is thirsty on a hot day. He values the first bottle of water at $7, the second at $5, the third at $3, and the fourth at $1. If the market price for a bottle of water is $4, what is Bert's total consumer surplus?

Ernie's cost to produce water is $1 for the first bottle, $3 for the second, $5 for the third, and $7 for the fourth. If the market price for a bottle of water is $4, how much producer surplus does Ernie get?

The chapter's conclusion that consumer surplus is the area below the demand curve and above the price is applicable to which type of demand curve?

The French expression 'laissez faire,' mentioned in the context of market efficiency, supports which policy approach?

What is the key difference between the concepts of efficiency and equality in the context of welfare economics?

If the market for turkey is in an equilibrium that maximizes total surplus, what can be concluded about the quantity of turkey being produced?

In a competitive market equilibrium, how is the supply of goods allocated among buyers?

In a competitive market equilibrium, how is the demand for goods allocated among sellers?

In the Elvis Presley album example (WTPs of $100, $80, $70, $50), if the auction price ends up at $75, what is the total consumer surplus in the market?

In the house painting example (costs of $900, $800, $600, $500), if the market price for painting a house is $700, what is the total producer surplus in the market?

Why is the benevolent social planner's job of allocating resources efficiently made easy by the market?

The 'Ticket Scalping' case study argues that the buying and reselling of tickets is a way to...

Which statement best describes the concept of total surplus?

An allocation of resources is considered inefficient if...

Melissa's willingness to pay for an iPod is $200. If she buys it on sale for $90, what is her consumer surplus?

Ernie's cost to produce a bottle of water is $3. If the market price is $6, what is his producer surplus on that bottle?

The 'Market for Organs' case study explains that making the sale of organs illegal is economically equivalent to the government imposing what?

At the socially efficient quantity of a good, what is the relationship between the value to the marginal buyer and the cost to the marginal seller?

If the current quantity of a good produced and consumed is less than the market equilibrium quantity, which statement is true?

If a market produces a quantity greater than the efficient quantity, what can be inferred?

What is 'market power' as defined in the conclusion of Chapter 7?

How does the chapter define an 'externality'?

In the house painting example, if only one house needs painting and the price is set by auction, which painter will win the job and at approximately what price?

Suppose an early freeze in California sours the lemon crop. What is the immediate impact on consumer surplus in the market for lemons?

In a market diagram, the total area between the supply and demand curves up to the point of equilibrium represents...

When economists evaluate market outcomes, what do they normally assume about the preferences of rational buyers?

According to the economic analysis in the 'Ticket Scalping' case study, if a city effectively banned all reselling of sports tickets above face value, what would be a likely result?