ECON 1051 1st Edition Lecture 16 Outline of Last Lecture I. Five Ways ACA is Helping Market II. Health Facts in the US III. In Comparison IV. Issues Insurance Companies Face V. Externalities Outline of Current Lecture I. Producer Surplus II. Total Economic Surplus Current LectureI. Producer Surplus a. Definitioni. The difference between the lowest price a firm would be willing to acceptand the price it actually receivesb. Example: i. 50 cups of lemonade are sold at $2.00 a cup and 40 are sold at $1.80 a cupii. Market is at $2.00 a cupiii. The producer surplus from selling the 40th cup is $0.20. II. Total Economic Surplus a. Definitioni. Sum of producer and consumer surplus b. To find: i. Use the area of a triangle ii. TS = ½ (b)(h)iii. Below the base is ten (highest price) and height is 5000 (quantity)These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.
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