Unit II - Price Controls (CS, PS, and DWL)

Front

A buyer's willingness to pay is that buyer's

Back

maximum amount they are willing to pay for a good.

Front

Efficiency loss is another term for...

Back

Deadweight loss

Front

When the government sets the highest price for a good or service.

Back

Price Ceiling

Front

Consumer surplus in a market for a good exists because: Some consumers are willing to pay more than the equilibrium price

Back

Some consumers are willing to pay more than the equilibrium price

Front

What is the equilibrium price of a book in this market?

Back

$85

Front

When the price is P_1, consumer surplus is

Back

A + B + C

Front

Given the demand curve pictured, if the price increases from $3 to $6 per unit, total consumer surplus will:

Back

decrease by $27

Front

In the diagram, consumer surplus is represented by: P2, B, P3

Back

P2, B, P3

Front

When the market price rises from P1 to P2, consumer surplus:

Back

Decreases by an amount equal to B + C

Front

Consumer surplus is the area

Back

below the demand curve and above the price.