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3.1 Efficiency of Market Equilibrium Flashcards | StudBud
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3.1 Efficiency of Market Equilibrium
3.1 Efficiency of Market Equilibrium
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Fun way to study 3.1 Market Equilibrium :)
Flashcards
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Answers
1
What is market equilibrium?
Lyle's coin in the well
Where supply equals demon
Where quantity supplied equals quantity demanded
Qs=Qd
2
How is equilibrium restored if there is a shortage?
Sellers will drop their prices until Qd=Qs
The price will be pushed up by consumers until = equilibrium
Consumers will bid up the price until Qd=Qs
Agents of S.H.E.I.L.D will drop of supplies in lola
3
What will cause the demand curve to shift left?
Increase in income (direct) tax
Raw imported materials
Decrease in consumer confidence
Increase in consumer confidence
4
Subsidy: Identify the deadweight loss
bc
ed
b
c
5
Tariff: Identify the new consumer surplus
abcd
ab
cd
a
6
What is deadweight loss?
The little triangle
Loss in allocative efficiency
Consumer and producer surplus lost to the market
A loss of deadweight e.g as Michelle would say, Roslyn
7
Indirect tax: Identify the area of the tax revenue
be
cd
b
e
8
If market price is above equilibrium there will be a.....?
Sublime
Shortage
Seven
Surplus
9
What is ceteris paribus?
All things are ever changing
A fairy
All other things held constant
When demand = supply
10
Assuming ceteris paribus, an increase in price will lead to a fall in quantity demanded
Latin Lingo
Demand Schedule
Change in Demand
Law of Demand
11
Minimum price control: Identify the deadweight loss
cde
b
cd
e
12
Max price control: Identify the new consumer surplus
ab
d
abc
a
13
Indirect tax: Identify the new producer surplus
edf
f
abc
a
14
One country model: Identify the gain in allocative effeciency
bcd
b
abcd
cd
15
What would cause the supply curve to shift to the right?
Increase in the exchange rate
A technological advamcement
Decrease in the price of petrol
All of the above
16
Min price control: Identify the new consumer surplus
a
abc
ab
bf
17
What is the definition of demand?
When someone is being extremely annoying
A willingness and ability to pay for a particular commodity
A strong or urgent command or request
A consumer's desire to pay for a specific good or service
18
What will cause the demand curve to increase?
Level of productivity
Increase in disposable income
All of the above
Increase in the price of a substitute
19
Tariff: Identify the deadweight loss
eh
cdefgh
cd
fg
20
The difference between the price consumers are willing to pay and what they actually pay
Producer Surplus
Producer Sruplus
Consumer Surplus
Comsuner Surplus
21
The quantity a producer is willing + able to provide at different prices over a period of time
Law of Supply
Definition of Supply
Equilibrium
Definition of Demand
22
Subsidy: Identify the gain in consumer surplus
a
g
fed
ha
23
One country model: Identify the consumer surplus after trade
b
a
eb
abcd
