Chapter 4: Economic Surplus

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Terms in this set (...)

Consumer Surplus
The difference between the highest price a consumer is willing to pay for a good or service and the amount price the consumer receives.
Producer Surplus
The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually recieves.
Price Floors
A legally determined minimum price that sellers may receive
Black Market
A market in which buying and selling take place at prices that violate government price regulations
Taxes
What is the most important method that government fund their activity?