8 terms

Ch. 7 (Surplus Value)

STUDY
PLAY
_______ is the amount a buyer is willing to pay - the amount the buyer actually pays.

Ex: -John is willing to pay $100 for a record
-He pays $80 is bidding war
-_______ surplus of $20
Consumer Surplus
_______ is the amount a seller is paid minus the cost of providing it.

Ex: -Painting job auctioned off
-Grandma will go down to $500
-Grandma wins at $600
-______ surplus of $100
Producer Surplus
_______ is the value to buyers - cost to sellers
Total Surplus
________ is someone who is just willing and able to pay the price that corresponds to that quantity and not a cent more, and who would be "priced out of the market" if the price were any higher.
Marginal Buyer
The minimum acceptable level of payment for the use of capital is called "normal profit" and any payment greater than this minimum is called "__________", producer surplus can be thought of as ____________ in this sense.
Economic Profit
Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

I sold a used laptop for $189, even though I was willing to go as low as $180 in order to sell it.
Producer Surplus
Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

Even though I was willing to pay up to $33 for a jersey sweater, I bought a jersey sweater for only $28.
Consumer Surplus
Identify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither.

I sold a watch for $59 on eBay last week. This week, someone offered me $188 for it.
Neither
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