chapter 5

Question 1

Competitive markets usually lead to the right ….

Answer 1

allocation of resources

Question 2

value vs price

Answer 2

value- what we get
price- what we pay

Question 3

marginal benift

Answer 3

value of addutional unit of good/service

Question 4

demand is determind by ?

Answer 4

willingness to pay

Question 5

what does demand curve reflect

Answer 5

reflects marginal benefit

Question 6

indiuval demand

Answer 6

price and quanity demanded by one person

Question 7

market demand

Answer 7

price and quanity demanded by all buyers

Question 8

consumer surplus

Answer 8

the extra benenfit gained from a good vs what you pay for it

Question 9

demand curve depends on

Answer 9

depends on the value we place on the good

Question 10

how to find consumer surplus

Answer 10

bh/2

Question 10

how to find total consumer surplus

Answer 10

find area under both curves and then add them together

Question 11

cost

Answer 11

its what the producer has to give up

its also what the producer revies

Question 12

marginal cost

Answer 12

cost of one more unit of the good/service

also the minimum price that the firm is willing to accept

Question 13

a supply curve is a

Answer 13

marginal cost curve

Question 14

induval supply

Answer 14

shows the realtionship betwween the price of a good and the quantity supplied by one producer

Question 15

market supply

Answer 15

shows relationship between price of a good and the waunity suppledu by all producers in the market

Question 16

producer surplus

Answer 16

the extra money producers get from selling something compared to how much it cost them to make it

Question 17

how to calc producer surplus whne given grpah

Answer 17

find area under it using bh/2

Question 18

how do you know that a competitive market is at equlbirum

Answer 18

wuanity demanded = quanity supplied

everyone who wants to buy something can find someone whos selling it and everyone who selling stuff can find someone who wants to buy it

Question 19

what does it mean when ;
marginal benefit = marginal cost

Answer 19

resouces are used efficentely –> aka efficient qaunity

Question 20

when you efficient quantity produced

Answer 20

it means total surplus is mamxised, which means that there is the right amount of goods/services being made to match what and how much the consumers want to buy

Question 21

when do you get market failure?

Answer 21

it can happen bc:

u make too much of an item or too little of an item