Chapter 21 - Market Efficiency and Government Intervention

Willingness

________ to pay is the maximum amount a consumer is willing to pay for a product.

Deadweight loss

________ from taxation is the difference between the total burden of a tax amount of revenue collected by the government.

government issues

The ________ licenses to limit the number of establishments that could be considered a nuisance to some citizens and they protect consumers from low quality product ps and poor service.

market equilibrium

The ________ maximizes the total surplus of the market because it guarantees that all mutually beneficial transactions will happen.

import ban

The ________ would cause domestic producers to gain at the expense of domestic consumers because consumers would lose more than domestic producers would gain, the ________ would cause a net loss for people in the United States.

Gasoline

________ where in response to sharp increases in the price of gasoline in the 1970s, the national government set a maximum price on ________.

Lowe

In other words, ________ rents are offset in art by lower housing quality.

Producer surplus

________ is the price a producer receives for a product minus the marginal cost production.

import restriction

A(n) ________ increases the market price and decreases the total surplus of the market.

excess demand

If the demand for tax goods is inelastic we need a large price hike to eliminate the ________ caused by the tax.

Deadweight loss

________ is the decrease in the total surplus of the market that results from a policy such as rent control.

Willingness

________ to accept is the maximum amount a producer is willing to accept as payment for a product; equal to the marginal cost of production.

Total surplus

___________ is the sum of consumer surplus and producer surplus.

Price ceiling

___________ is a maximum price set by the government.

Price floor

____________is a maximum price set by the government.