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Market power and externalities are examples of market failures.

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An increase in price increases consumer surplus.

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Consumer surplus measures the benefit to buyers of participating in a market.

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Producer surplus is the amount a seller is paid minus the cost of production.

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True

Ticket scalping can increase total surplus in the market for tickets to sporting events.

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Efficiency is related to the size of the economic pie,whereas equality is related to how the pie gets sliced and distributed.

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Unless markets are perfectly competitive,they may fail to maximize the total benefits to buyers and sellers.

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True

Total surplus = Value to buyers - Costs to sellers.

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Consumer surplus is the amount a buyer actually has to pay for a good minus the amount the buyer is willing to pay for it.

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The area below the demand curve and above the supply curve measures the producer surplus in a market.

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In order to calculate consumer surplus in a market,we need to know willingness to pay and price.

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At any quantity,the price given by the supply curve shows the cost of the lowest-cost seller.

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False

All else equal,an increase in supply will cause an increase in consumer surplus.

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Suppose you sell a kayak for $600,but you were willing to sell it for $450.The buyer was willing to pay $650.The total surplus is $200.

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Consumer surplus can be measured as the area between the demand curve and the supply curve.

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Consumer surplus can be measured as the area between the demand curve and the equilibrium price.

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Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25.If the market price is $40 for this transaction,then the total surplus would be $15.

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Even though participants in the economy are motivated by self-interest,the "invisible hand" of the marketplace guides this self-interest into promoting general economic well-being.

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Welfare economics is the study of the welfare system.

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If Darby values a soccer ball at $50,and she pays $40 for it,her consumer surplus is $90.

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Showing 1 - 20 of 65

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