Chapter 21 - Market Efficiency and Government Intervention

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15 Terms

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Willingness
________ to pay is the maximum amount a consumer is willing to pay for a product.
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Deadweight loss
________ from taxation is the difference between the total burden of a tax amount of revenue collected by the government.
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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.
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market equilibrium
The ________ maximizes the total surplus of the market because it guarantees that all mutually beneficial transactions will happen.
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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.
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Gasoline
________ where in response to sharp increases in the price of gasoline in the 1970s, the national government set a maximum price on ________.
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Lowe
In other words, ________ rents are offset in art by lower housing quality.
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Producer surplus
________ is the price a producer receives for a product minus the marginal cost production.
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import restriction
A(n) ________ increases the market price and decreases the total surplus of the market.
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excess demand
If the demand for tax goods is inelastic we need a large price hike to eliminate the ________ caused by the tax.
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Deadweight loss
________ is the decrease in the total surplus of the market that results from a policy such as rent control.
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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.
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Total surplus
___________ is the sum of consumer surplus and producer surplus.
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Price ceiling
___________ is a maximum price set by the government.
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Price floor 
____________is a maximum price set by the government.