MICROECONOMIC

ANALYSIS
THE STANDARD MODELS THAT WE USE IN ANALYZING MARKETS ARE
BASED ON THE NEOCLASSICAL SCHOOL OF THOUGHT

MIRA RIO HIGH SCHOOL | MARGARIDA

MONIZ MOREIRA | NOVEMBER 2022
7. MARKET EQUILIBRIUM, THE PRICE
MECHANISM AND MARKET EFFICIENCY MICROECO
NOMICS

YOU SHOULD BE ABLE TO: (STANDARD LEVEL)

EXPLAIN THE CONCEPT OF EQUILIBRIUM

ECONOMICS
EXPLAIN THE EFFECT OF CHANGES IN DEMAND AND SUPPLY UPON THE EQUILIBRIUM

EXPLAIN THE CONCEPTS OF EXCESS DEMAND AND EXCESS SUPPLY

EXPLAIN THE FUNCTIONS OF THE PRICE MECHANISM

EXPLAIN THE CONCEPTS OF CONSUMER AND PRODUCER SURPLUS

EXPLAIN THE CONCEPT OF SOCIAL/COMMUNITY SURPLUS

EXPLAIN THE CONCEPT OF ALLOCATIVE EFFICIENCY

YOU CAN FIND MORE INFORMATION IN YOUR

COURSE COMPANION PAGES 97 TO 107
QUESTION 1
USING A DIAGRAM TO
ILLUSTRATE YOUR ANSWER,
EXPLAIN WHAT HAPPENS TO
CONSUMER SURPLUS WHEN
PRICE DECREASES.
THE EVOLUTION
CHAPTER 7 | MARKETOF
EQUILIBRIUM, THE PRICE
ECONOMIC
MECHANISMTHINKING
AND MARKET EFFICIENCY
QUESTION 2
USING A DIAGRAM TO
ILLUSTRATE YOUR ANSWER,
EXPLAIN WHAT HAPPENS TO
PRODUCER SURPLUS WHEN
PRICE INCREASES.
THE EVOLUTION
CHAPTER 7 | MARKETOF
EQUILIBRIUM, THE PRICE
ECONOMIC
MECHANISMTHINKING
AND MARKET EFFICIENCY
QUESTION 3
EXPLAIN THE VIEW THAT THE
BEST ALLOCATION OF
RESOURCES OCCURS WHEN
CONSUMER SURPLUS AND
PRODUCER SURPLUS ARE
MAXIMIZED.
THE EVOLUTION
CHAPTER 7 | MARKETOF
EQUILIBRIUM, THE PRICE
ECONOMIC
MECHANISMTHINKING
AND MARKET EFFICIENCY