ECON 201 exam 2 - Oregon State University exam with complete solution graded A+

willingness to pay (reservation price) - the maximum price that a buyer would be willing to pay for a good or service willingness to sell - the minimum price that a seller is willing to accept in exchange for a good or service surplus - a way of measuring who benefits and by how much producer surplus - the net benefit that a producer receives from the sale of a good or service how to measure producer surplus - the difference between the producer's willingness to sell and the actual price total surplus - a measure of the combined benefits that everyone receives from participating in an exchange of goods or services zero-sum game - a situation in which whenever one person gains, another loses an equal amount. such that the net value of any transaction is zero efficient market - an arrangement such that no exchange can make anyone better off without someone becoming worse off deadweight loss - a loss of total surplus that occurs because the quantity of a good that is bought and sold is below the market equilibrium quantity market failure - marginal social benefit doesn't equal marginal social costprice control - a regulation that sets a maximum or minimum legal price for a particular good