Chapter 7 Reflection

1.  Describe efficiency from the perspective of an economist.

Efficiency from the perspective of an economist is defined as a state in which all resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

2. Why are producer and consumer surpluses important in determining market equilibrium?

Producer and consumer surpluses are important in determining market equilibrium because this is the cost and the willingness to buy and sell that creates the market equilibrium.

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?

I do not think market efficiency should always be the goal of policy setters because they also need two consider equality. There is a trade off between efficiency and equality. I think both need to be considered while allowing for a free market and the invisible hand to make the decisions.