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  • The change in … surplus associated with a price change has a roughly trapezoidal shape. It can be interpreted as the change in utility associated with the price change. #181
  • In general, we can use the compensating variation and the equivalent variation in income to measure the monetary impact of a … change. #182
  • If utility is …, the compensating variation, the equivalent variation, and the change in consumer’s surplus are all equal. #183
  • In the case of supply behavior we can define a producer’s surplus that measures the net benefits to the supplier from producing a given amount of output. #184
  • The term v(n) − pn is called consumer’s surplus. #185
  • If a single consumers is involved we can add up each consumer’s surplus across all the consumers to create an aggregate measure of the consumers’ surplus. #186
  • This is called the equivalent variation in income since it is the income change that is opposite to the price change in terms of the change in utility. #187
  • People try to choose the best patterns of consumption that they can afford. This is known as: #188
  • the area above the supply curve is known as producer’s surplus. #189
  • The … curve measures how much people will be willing to supply of some good at each price. #190
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