1. 10/22/20141 Consumers, Producers, and the Efficiency of Markets Chapter 7

2. 10/22/20142 Outline  Consumer Surplus  Producer Surplus  Market Efficiency  Conclusion: Market Efficiency and Market Failure

3. 10/22/20143 Consumer Surplus (CS)  Willingness to pay  Using the demand curve to measure CS  How a lower price raises CS  What does CS measure?

4. 10/22/20144 Producer Surplus (PS)  Cost and willingness to sell  Using supply curve to measure PS  How a higher price raises PS

5. 10/22/20145 Market Efficiency  The benevolent social planner  Evaluating the market equilibrium Should there be a market in organs? Should there be a market in organs? Ticket scalping Ticket scalping

6. 10/22/20146 Conclusion  Market efficiency  Market failure

7. 10/22/20147