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Consumer surplus and producer surplus

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Reference no: EM131651009

Questions:

1. What is the origin of both consumer surplus and producer surplus? How do properly functioning markets maximize consumer and producer surplus while optimally allocating resources?

2. How do positive and negative externalities lead to under- and over-allocations of resources?

3. Why does "government failure" happen?

4. How can the government's power to coerce (influence economic behavior) be economically beneficial?

5. What is the usefulness of the total revenue test for price elasticity of demand?

6. What are the factors that affect price elasticity of demand and price elasticity of supply? What are some applications of each?

7. What are the functions and responsibilities of the Federal Reserve?

8. Why is Federal Reserve independence important?

9. What are the components of U.S. money supply?

Reference no: EM131651009

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