1. Describe efficiency from the perspective of an economist.
The belief that it is impossible to help or give one person without the other one losing something. It is also when production of goods and services maximizes total surplus. The community plays an important role because when they do their best, they ensure a stable economy with low cost production and consumption. Furthermore, it is also doing things the best way we can using limited resources without wasting.
2. Why are producer and consumer surpluses important in determining market equilibrium?
Surplus is important because the price equilibrium should be beneficial for the consumers and producers. It should be where both can obtain something without losing. If the market surplus is below the equilibrium price then quantity supplied is going to be lower than quantity demanded.
3. Should market efficiency always be the goal of policy setters? Why or why not? Is there a trade-off between efficiency and equality? If you don’t like efficiency what is your preferred alternative?
Market efficiency should be part of the goal. The best way to do it is to bring equality up to a level where it does not hurt efficiency. A balance is needed because if there is more than the other than it reduces the other. Society needs both.
There is a trade-off between efficiency and equality because efficiency is based on how much someone values something while equality is equal opportunities for everyone. I like efficiency because I believe that in most cases something cannot be improved without something else being affected.
Netsy's Thoughts 