AP Micro Quiz 8
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10 Terms
Consumer’s Willingness to Pay
The maximum price a consumer will buy that good
Individual Consumer Surplus
Net gain a buyer achieves from the purchase of a good
Willingness to pay - price paid
Total Consumer Surplus
Sum of individual consumer surpluses
Equal to the area below the demand curve but above the price
Cost
The lowest price a seller is willing to sell the good
Individual Producer Surplus
Net gain between the price the seller gets and the cost
Price received - cost
Total Producer Surplus
Sum of individual producer surpluses
Equal to the area above the supply curve but below the price
Equilibrium
An economic situation when no individual would be better off doing something different
Where the supply and demand curves intersect
Equilibrium price
The price at the point where the supply and demand curves intersect
Equilibrium quantity
The quantity of the good where the supply and demand curves intersect
Disequilibrium
When the market place is above or below the equilibrium point