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9 Cards in this Set
- Front
- Back
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Consumer Surplus CS |
The difference between the price consumers are willing to pay and the price they actually pay
Increases when more goods are consumed |
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Producer Surplus |
The difference between the price producers are willing to supply at and the price they actually supply at
Increases when more goods are sold |
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Quota CS and PS |
Price increases, Quantity traded falls, CS falls, PS increases, DWL is triangle on right |
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Deadweight loss |
The loss in consumer and/or producer surplus not offset by something else |
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Allocative efficency |
The maximization of the sum of producer and consumer surplus |
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Subsidy PS and CS |
CS and PS increase, DWL arises as Government spending is not fully offset by increases in CS and PS |
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Maximum Price CS and PS |
CS increases, PS falls, DWL arises as loss in CS and PS is not offset by gain in CS |
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Tariff |
CS falls, PS increases, Tax reveneue is the middle square, DWL is the two triangles |
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Min Price |
CS falls, PS increases, DWL arises as a result of the loss in quantity |
