ECON 200 Study Guide - Final Guide: Economic Surplus, Reservation Price, Demand Curve
13 Dec 2018
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Welfare economics: welfare economics: the study of how the allocation of resources affects economic well-being. Willingness to sell: willingness to sell is the minimum price that a seller is willing to accept in exchange for a good or service. Total surplus: total surplus: is a measure of the combined benefits that everyone receives from participating in an exchange of goods or services, total surplus is the sum of consumer surplus and producer surplus. Willingness to pay and the demand curve: at prices above the maximum willingness to pay, the opportunity cost is greater than the benefits; at lower prices, the benefits outweigh the opportunity cost. Measuring surplus: surplus: a way of measuring who benefits from transactions and by how much. Producer surplus: the net benefit that a producer receives from the sale of a good or service, measured by the difference between the producer"s willingness to sell and the actual price.
