Consumer surplus: Sums up the difference between the declining willingness to pay per unit of the good reflected in the downward sloping demand curve and the constant price per unit consumers pay in a market. Reflects the difference between the average cost of production and the price that is charged in the market when a specific tax is placed on consumers. Is the marginal cost curve at and above the point where AC(q)=MC(q), q=0 elsewhere. Is the increase in output that occurs over time after accounting for growth that can be explained by increased use of capital, labor, energy, and material. 10) Circle the correct answer Condition A Condition B What type of condition is B for establishing A? MC is above AC at q AC is upward sloping at q N, NS S, NN N,S The good is The market is perfectly N, NS S, NN N,S homogeneous competitive The market is perfectly The good is homogeneous N, NS S, NN N,S competitive You can get to NYC from There is a bus to NYC from N, NS S, NN N,S Syracuse in less than six Syracuse that makes the trip in hours. less than six hours. A quantity is the profit The quantity is produced in a N, NS S, NN N,S maximizing quantity technologically efficient way. The last dollar rule is MRS=MRT at a bundle N, NS S, NN N,S satisfied at a bundle Output more than doubles The firm is experiencing N, NS S, NN N,S when inputs double increasing returns to scale The point defined by the The point defined by the input N, NS S, NN N,S input bundle (K,L) bundle (K,L) lies on the satisfies w*L+r*K=C expansion path N,NS : Necessary, not sufficient S, NN: Sufficient, not necessary N, S: Necessary and sufficient.
Consumer surplus: Sums up the difference between the declining willingness to pay per unit of the good reflected in the downward sloping demand curve and the constant price per unit consumers pay in a market. Reflects the difference between the average cost of production and the price that is charged in the market when a specific tax is placed on consumers. Is the marginal cost curve at and above the point where AC(q)=MC(q), q=0 elsewhere. Is the increase in output that occurs over time after accounting for growth that can be explained by increased use of capital, labor, energy, and material. 10) Circle the correct answer Condition A Condition B What type of condition is B for establishing A? MC is above AC at q AC is upward sloping at q N, NS S, NN N,S The good is homogeneous The market is perfectly competitive N, NS S, NN N,S The market is perfectly competitive The good is homogeneous N, NS S, NN N,S You can get to NYC from Syracuse in less than six hours. There is a bus to NYC from Syracuse that makes the trip in less than six hours. N, NS S, NN N,S A quantity is the profit maximizing quantity The quantity is produced in a technologically efficient way. N, NS S, NN N,S The last dollar rule is satisfied at a bundle MRS=MRT at a bundle N, NS S, NN N,S Output more than doubles when inputs double The firm is experiencing increasing returns to scale N, NS S, NN N,S The point defined by the input bundle (K,L) satisfies w*L+r*K=C The point defined by the input bundle (K,L) lies on the expansion path N, NS S, NN N,S N,NS : Necessary, not sufficient S, NN: Sufficient, not necessary N, S: Necessary and sufficient.
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